My boss told me he's looking for another job.

Isn’t that an inapproporiate thing to share with an “underling”? We’ve talked about seeking greener pastures in general terms since we were outsourced a few months ago - none of us are pleased with our new employers. Though I have been looking for a new job for the last 2 months (and I think I found something), I’ve never told him I was in the hunt. A little voice in my mind is saying “It’s a trap. He’s trying to find out if you’re looking.” I’ve always trusted him in the past, but I just don’t know.

Just a little workplace drama for you entertainment.

It could be a hint there’s a promotion in store for you pretty soon, so you’d better start looking like you’re ready for it. If he really does go, and you do too, consider this a golden networking opportunity.

It may not be a trap, but I don’t think it’s ever a good idea to tell anyone at your current place of employment that you are looking elsewhere. Your boss may figure you have quit already (which in a way you have), and he may start looking for your replacement.
Or on a more positive note, as the other post said, you may be next in line for a promotion.

Play your cards close to your vest. How about that for a pithy cliche. And good luck.