Securities Research Services

Tuesday, May 27, 2008

Weekly Sell Signal vs End of Month Window Dressing

SPY sold off hard last week from the resistance area we have been talking about for weeks now. Volume increased on the downturn and the SPY is now trending down on both a near term and long term basis, the ideal risk:reward situation for short trades.

Keep in mind that this week kicks off month end window dressing, so a minor bounce in the SPY is expected. With last week's heavy sell off, which created a bearish engulfing signal on a weekly basis, overhead resistance should keep any rallies in check not far above the current price.

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