I believe the easy trade on the long side is now over. Normally, a powerful rally coming off of such an oversold condition should be given more time. But given the weakening economy, the weak seasonality and the strange way the market has been trading I would err on the side of caution. I might let some positions run but am not considering adding anything new.
There is little in the short term suggesting that the market should be shorted either. The best thing the bulls have going for them is how few actually believe in this rally. It has also been short in duration and it would not be surprising if we did not see a meaty pullback until after expiration. In short, the sidelines are not a bad place to be.