northam,
things to consider regarding OB ...
a) solid trending markets can stay OB for a long time
b) SPY today finally closed at a HH, above the January high
c) the S&P500 hasn't had the consolidation that it had at the end of Feb., and is still smoothly trending upward.
d) the trading volume isn't much different from the rise into January, ignoring holidays (which always have low volume)
e) current volume is lower than during the fall after the Jan high. But I see that as "climbing a wall of worry".
f) financials are in the middle of testing, and possibly breaking through, the Island Reversal of October, 2009. That Oct reversal high is $15.76, or 16-cents above today's close, and it also coincides with the 30+ days of consolidation of October, 2008. Successfully breaking through that level is very significant, and will likely cause a run in financials which could move it up another 27% very quickly.
g) financials are a large component of the S&P500.
I see it as risky to short $SPX or XLF now. One could make a little money here with shorts, but that would be at the risk of having the wrong mindset and being caught with your pants down, and missing a great short-term rally driven by financials. Then, after that would be a good time to take profits and think about short positions.
Or ... I could be totally wrong.
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