There are two things I like to see when entering a short position on the broader market. The first is that the market is maximum overbought or nearing it. After today, the market will be maximum overbought. The second thing I like to see is that sentiment is lopsided towards the bullish camp. That is not yet evident as it seems that investors are still reluctant to embrace the rally. I am hoping that we will see more exuberance today. If so, I will move to a net short position in time for Turnaround Tuesday.
The caveats are that option expiration could drag this rally out to the end of the week. And the period heading into Thanksgiving is seasonally strong. As such any short exposure I take on will be relatively small.