Market Sentiment and Technicals update

I made a few screenshots before the opening today, which marked the first real down day for the past 2 months (!!!).

The S&P 500 BPI had reached the highest level in 3 years (and probably far longer, although I don't have the chart to verify) and had been hovering them for a very long and extended period.

Here's what the S&P 500 Bullish Percent Index looked like:

The VXO had also reached record low levels (record low for the past 3 years, as it remained for many months around 10 during the "great moderation" of 2005-2007 period) and showed way too much complacency given the poor state of the world economy and the so called "fundamentals".

And here's the VXO (Original Formula of the Volatility Index):

During the same period of time, short interest on the NYSE has fallen dramatically, to the lowest levels since 2007, reports ZeroHedge:

the bulk of the market meltup over the past several months has been due exclusively to shorts covering existing positions. Well, with short interest now at a multi-year low of 12.4 billion shares (lowest since 2007), compared to 14.5 billion just after the Flash Crash, a 13.6 billion average over the period, and the lowest amount since the Lehman failure [...]

They have even provided a neat chart:

Given the previous market sentiments update stating that basically everybody is ultra bullish and very much "all in" with their long positions, and the current update showing extremely low levels of short positions, it might mean that we are very close to a top, or even that the big decline has begun.

This might be yet another head-fake, and the relentless grind higher could resume tomorrow. But I'm positioned for a decline and rise of volatility...