Here's what I see going through my watchlist: a list of potential short candidates longer than my arm. Noticed the same imbalance last night too. As a result I started putting more money to work this afternoon on the short side.
Looks to me as if the financials are getting ready to lead us lower once again. That has been the number one market tell since August of last year. When the financials start to swoon it gets ugly quick. I haven't done too much with this idea relative to how strongly I feel about it but I did buy back some SKF (yesterday) and shorted some BAC (today). I intend to aggressively short BAC (I'm an unsatisfied customer) but I'll wait until it cracks the 50-dma to double my position.
The last market swoon we had didn't hold and in fact rebounded quite violently due to the fact that the financials (and housing stocks) were bouncing. With the financials rolling over I'm much more confident betting against the market here. Mark my word (ad nauseum), pain lies directly ahead.
Tomorrow is month end. I'm up about 7.5% in February (not quite my best levels but God-like returns nonetheless). The market itself is basically flat during that time.
Time to go hunt some bulls. I've sharpened my bear claws.
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