With each tick higher in the stock market, interest rates and commodities I see a better setup on the short side. I view a stiff correction as a question of when, not if. That said, my net short position remains small for two reasons. Gilead took a dive late in 2010 and I decided to scoop it up, which lowered my net short exposure. Secondly, I am having a hard time wrapping my arms around the timing of a move.
I believe that yesterday's trading has brought us a lot closer to a correction. The news of 300,000 jobs was as good as it gets and call buying was exuberant, even considering recent history. Treasuries are now dangerously close to a level that I believe will start to effect the stock market and economy and commodity indexes are perched at multi year highs.
The VIX is sitting at extremely low levels which allows one to achieve a significant degree of leverage without having to risk a large portion of money. I am stalking the short side and am getting very excited about the potential.