When a trader sells a long position and/or sells short into an uptrend. The idea is that a reversal is coming even though the current trend does not show that. It is the opposite of “buying into weakness.” The trader would have to feel certain, and have a tolerance for risk about the change in trend to enter a short in this manner, but by entering a short early he can guarantee his position and not miss the move down when it comes.

This is the total number of shares of a security that have been sold short. This information is often used as a contrary indicator by technicians in order to predict a short squeeze. This situation occurs when a proportionately high percentage of investors are short the stock. The stock will get an extra boost on any positive news as investors are forced cover their shorts.

This is the number of days it would take to close out all short positions based on average daily volume.

A technical indicator represented by a line on a chart that is taken from the average of security prices based on a time period- some usual time periods are 10, 20, 30, 50, and 200 days. Moving averages allow for a set of data points to be “smoothed” out in order to analyze overall trends for a specific time period. The calculation for a simple moving average is quite easy; take the closing prices for a specified period add them together and then divide by the length of the period. Often times, technicians use moving averages for buy and sell signals. When the 50day moving average crosses over the 200day moving average, a “buy” signal is flashed as the security is being accumulated. However, as seen from the chart below, when the 50day ma crosses below the 200day ma, a “sell” signal arises as the stock is under distribution.

The SPX is a value weighted index – meaning each stock’s weight is proportionate to its market value – comprised of 500 leading companies representing the broad U.S. Economy. It is considered by many to be the ideal proxy for the total market and is the most widely used benchmark of U.S. equity performance.

This indicator measures the relationship between the S&P 500 and the yield on the 10 year treasury. The purpose of the indicator is to see when one becomes overvalued relative to the other. It will typically fluctuate between -3 & +3, a measure larger than this could mean that one is overvalued relative to the other and a correction could occur.

The price level on a chart where a security finds buyers. The security can be in a price decline but when it approaches the support level it may bounce off of it, level off, but it won’t precede any further down in price. If the security does break a support level, this is viewed as bearish and the former support level will now serve as resistance. It is important to note that support levels can be up-trending, horizontal, and/or down-trending depending on the type of the present trend.