Powershares are ETF's that use leverage and go either long or short. An example would be the QID. They are very liquid with a tremendous amount of activity and volume.
At times, certain of these ETF"s can predict short term moves in the market.
If a leveraged short ETF is up, while the underlying market is also up–there is a strong probability that the market will reverse course and sell off.
Are the hedge funds and other program traders observing something that leads them to take positions against the market or are they betting on a reversal, by buying the short ETFs in advance of initiating sell programs that will pressure the market downward.
This last strategy would be somewhat similar to front running, but probably not illegal.