We finally saw the mood swing to extreme bearishness yesterday. The put/call ratio has been at these levels during the decline so I can't point to any statistics that made yesterday special. But everything I heard yesterday was resoundingly bearish, save for some perma bulls and even they sounded iffy. It was very different from the recent talk of a quarter end rally or a range. In addition, we are now oversold and there were extreme breadth readings yesterday that usually lead to some sort of throwback rally.
Even if we are in a renewed bear market it usually does not pay to short when sentiment is extreme and the market is oversold. It was true that we were in a secular bear market in March 2009 and it was true that the piper still had to be paid. That did not stop the market from rallying 80% and it will not necessarily stop the market from rallying now.