What to Short Amid Stock Selloff: Kelly

The selloff in stocks has further to go, Brian Kelly of Shelter Harbor Capital said Wednesday after the major indices closed lower.

"I think it's a little early to have a victory lap," he said. "It was a lot more comfortable in the bear suit today."

On CNBC's "Fast Money," Kelly said that he was watching the bond market for a tell, also adding that Europe was "the biggest catalyst out there."

Kelly saw a "significant deterioration of the economy there, and that's 30 percent of the global economy."

"That has a major impact on corporations, and so that's why I think that this selloff, if today was the beginning of it, has a lot more legs," he said.

Kelly said that he would likely add to his short positions in Asian indices.

He also added that he was short crude oil and commodities, except for gold, which also saw declines, with a stop at $1,550 an ounce.

One factor not to consider too closely included bond spreads, Kelly said.

"You really shouldn't be looking at the bond spreads because what happened with Cyprus is they told you you're a lot safer to be in a government bond than you are to actually be in a bank," he said.

Trader disclosure: On April 3, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is short GLD Puts; Jon Najarian is long TXN; Jon Najarian is long VXX calls/Short puts; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long C; Tim Seymour is long PNC; Tim Seymour is long GS; Tim Seymour is long JPM; Tim Seymour is long WFC; Tim Seymour is long GDX; Tim Seymour is long INTC; Tim Seymour is long MSFT; Dan Nathan is long GS MAY 145/135 PUT SPREADS; Dan Nathan is long MASFT APR 28 PUTS; Dan Nathan is long AMZN APR 240/200/160 PUT FLY;