This is why its not easy to trade in the markets

The markets have been overbought for a loooong time now but they keep going higher.
Now you see many momentum stocks lose their momentum, AAPL, RIMM, AMZN etc. and the markets still manage to be higher.
This drags in the casual trader/investor just to see the markets tank suddenly.
Then they get frustrated and give up.
This is why the market proffessionals are called "smart money " .
Well its not always that they are right always, like you saw, "smart money" was heavily invested in banks and got floored when the banks tanked.
But as a rule of thumb , avoid when "smart money", wait a minute, lets just call them "big money". So when big money starts buying, just keep away ( away from shorting, if you wanna buy , then wait for a breakout). How to know they are buying, its when the stock/market just keep going up for no reason.
It also works the other way, then big money is selling the stocks or markets keep going down no matter what.
This is also know as " The trend is your friend". Its your friend not because you think similarly but because big money is dictating the trend and they can move markets.