Let's keep in mind that we have 2-3/4 sessions remaining in the month of May, and not too many fund managers are interested in getting all that aggressive either on the buy or sell side ahead of Thursday's month-end. Purely from a technical perspective, my inclination is to think that as long as the cash SPX is trading above key support at 1509/05 heading into Thursday afternoon, that fund managers will hold their bullish bias (long positions) rather than take profits. However, if the action on the tape is sluggish or weak, and/or, if the SPX is pressing towards 1505, my sense is that come Thursday afternoon, we may see some potent long side liquidiation to pre-empt the fear or the reality of additional weakness into the next important support area at 1490.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.