Bespoke Invest blog has the list of stocks in the S&P 500 with at least 25% of their shares sold short. Interestingly, in a 'flattish' market for 2011, these named have declined on average by a quarter of their value. Only 5 are positive for the year. Of course, that is not to infer investors made all those gains - many people (hand raised) like to jump on weak stocks. Usually a body in motion, remains in motion.
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Speaking of bears, Bespoke also reports that the AAII bear reading is at the lowest levels since January. Remarkable considering the events in Europe - I guess moral hazard is now built in every fiber of our souls. They'll come to the rescue - they always do