Heading into the seasonally weak time of the year in May I was very bearish as sentiment was giddy, but we will now be heading into the seasonally strong part of the year in a few weeks with sentiment a lot more subdued. Hedge funds have largely de-risked and individual investors have done the same. As a result I have little interest in trying to short the market unless all the ducks are lined up.
I have been burned too many times shorting during the seasonally strong times of the year to not take seasonality into consideration. This does not mean that I will not go short, but that everything will need to line up for me to do so. The market will need to be maximum overbought, preferably on a short term and intermediate term basis. Sentiment will need to be extreme. This does not mean that I will necessarily be long, as it is possible I will partially or fully hedge my portfolio.