Short Interest way down in July - Contrarian Sign?

Short interest on the S&P 500 is down to its lowest level since February. Investors were short 8.7 billion shares of the index at the end of July, Bloomberg reports today. That’s a 12% drop in just two weeks. Shorts reduced bets against financials the most, down 31%.

Make of this what you will, but feels like one piece of the contrarian puzzle that has me starting to lean short again. That said, I am not committed to the short side yet as it feels like we may get a few more pushes or consolidate for a while before we move back down.