Sentiment has definitely improved but it does not seem to be extreme enough for me to get aggressively short on an overbought reading:
- The II survey is showing 46% bulls. At better tops since the March 2009 lows we have seen that number above 50% and bears closer to 20%. Bears currently stand at 28%.
- The 10 day moving averages of the put/call ratios still have room before they reach an extreme.
- Rydex traders are not nearly as bullish as they were at previous tops.
For now I think we are late in the game but with sentiment still not extreme I am not looking to take an aggressive short stance. That could change if the facts change.