We’re comforted by the fact that we’re in good company in our bearish stance. Stansberry and Associates’ Jeff Clark left the party when the S&P 500 crossed over 855. He says there are three brutally bearish sell signals right now:
1) Insiders are selling stocks at the fastest pace in two years.
2) The CBOE put/call index is at a frighteningly low level.
3) Stocks are overbought: 91% of stocks on the S&P 500 are above their 50-day moving averages.
Here’s Jeff on why he remains bearish:
So while everyone else is dancing with lampshades on their heads and celebrating the 0.6% gain in stocks this year, smart traders are preparing for the next big move.

It’ll be to the downside.
Stocks are overbought right now. That’s clear. And there are times where extremely overbought markets get even more extreme. It looks like we’re now in one of those times. So the market can still work its way higher.

Buying into these conditions, however, is rarely a smart move. The risk/reward weathervane is blowing strongly in the direction of risk. In fact, we’re rapidly approaching the best short-selling opportunity of the year.