The market should pull back in the coming days as it is overbought and heading into weak seasonality. I believe a large portion of the short base covered yesterday as we cleared obvious "resistance", leaving less cushion for the market if we do manage a move lower. Although "de-risked" hedge funds should provide some cushion on a move lower.
For the past couple of years the market has overshot to both the upside and downside as momentum players carry the market much further than it should go. For that reason I am not interested in going short until all the ducks line up. I still would like to see evidence that hedge funds have re-risked and sentiment to get more positive before initiating a short position.