Everyone is calling this week's one day rally as a sign the bottom is in.  While we will not ultimately know until weeks or months from now, I'm just not so sure the bears are going to let the bulls off the hook this easily. 

While I have no hard numbers, the number of investors in bear funds like FAZ (Financial Bear 3x Shares) has grown significantly.  In past bear markets, funds like this haven't been available to the common investor.  We've been in a bear market so long now, I feel like people will be tempted to add to their losing bear fund positions which will only put more pressure on the underlying stocks at least in the interim. 

Of course, ultimately people will have to cover their bearish positions which will only add more fuel to the fire.  We could see a 20-30% pop over just a few short months just on short covering and new money inflows. 

As for my personal positioning right now, I'm intermediate term neutral and short-term bullish.  Into last week's selloff I aggressively added call positions on the cheap and have amassed a nice April 800 call position in the e-mini SP futures.  I believe we'll re-test the 800 resistance level over the next week or two and I'll scale out of my calls on the way up starting with the 750 level.  In turn the value of these calls will have quadrupled if I get the timing right.

Once we get near 800, I'll look for signs of weakness and look to get net short again for a final re-test of 700. 

This is just my script applied to the market, but like always the market isn't going to play out like movie.  So I need to be flexible, hence the need to scale in and out.