Where is the 3-5% Market Correction?

In my blog of February 27th I expressed the thought that a 3-5% market correction may be happening in the March/April timeframe before the equity markets resume upward movement in the latter part of Q2 and in Q3 to reach a level of 1450-1500 on the S&P 500 this year. Since then the S&P 500 has gone from 1367 to 1404, up almost 3%. What gives?

The temporary resolution of the Greek debt drama has, of course, had a beneficial effect in adding some calm to the equity and debt markets.

But most importantly, the US economic recovery has continued to move slowly along a recovery path. Of more than 40 national and regional economic data points¹ that have been reported from March 1st to March 16th, only 9 have been adverse to a continuing recovery and some 25 have been favorable. The remaining data points were inconclusive or neutral. This bodes well for a continuing rise in the equity markets --- but the market can be fickle as well as infatuated --- and a couple of downward disappointments could very well send us into correction mode.

While I continue to be fully invested at this time (between 90-95% net long equity positions), I've put tiered trailing stop loss orders in place on about 65% of my equity holdings --- particularly those most susceptible to a market correction. This should allow me to protect most of the not-yet-realized portfolio gains this year (YTD performance is above 25% vs. 11.6% for the S&P 500 index). The other 35% of the portfolio holdings could be liquidated on a case-by-case basis if any of the tiered stop-loss orders trigger.
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¹   These economic data points include, among others, construction spending, jobless claims, non-farm payrolls, motor vehicle sales, personal income and outlays, factory orders, capacity utilization, retail sales, consumer credit, job-cut reports, employment indices, business inventories, wholesale trade, international trade, export and import prices, general business conditions indices, consumer and producer prices and consumer sentiment.