We are also preparing a bearish watch list, waiting for a better opportunity to add some short positions at slightly higher levels. We are following our Relative Strength Wednesday work, looking for bearish delta in the weakest indices. We are looking for Very bearish rated stocks, with weak relative strength and weak money flow. While we can't screen for it, we also look for bearish divergences in the OB/OS oscillator. Our screen yielded about 40 potential shorts. A handful with Chaikin sell signals today.
We are not ready to to pull the trigger on any of these shorts today, as the rally may have a little steam left in it.
As the SPY gets a little closer to 250, and maybe even 260, we'd re-visit this list and use it to begin scaling into a few short positions.