The Ts indicators closed at 0.84 and 0.89, an as both are below 1.00 we are said to be in a Down trend. However as the 10 week moving average is above the 50 week moving average on the S&P 500, we are said to be in a DN/UP condition. The recent rally has brought us out of the near term Oversold condition, and as a result we want to increase our short side exposure. We will short the following at the market opening price;

1) Regeneron (REGN – 28.65) we will short 350 shares at the market opening price. Technically REGN has been on a tear lately, rising over 80% since November. The stock made a $28.74 high in 2007 before falling to $12 on the panic and is now back to that old high. If there was a level we would see some consolidation this is it. Fundamentally REGN has been rising on a deal with Sanofi, who increased their funding for this development biotech company. They have one product awaiting FDA clearance, but any material change to reversing losses is a long way off. This is primarily a technical play in that a spike to an old significant top often meets near term resistance. Place stop $30.40.

2) Armstrong World (AWI – 38.15) we will short 260 shares at the market opening price. Technically AWI has been rolling over since last November’s $45 top capped a eight month quadruple in price; but has rallied recently towards its down sloping 50 day average. Fundamentally the building material company relies on commercial construction activity, and certainly for now, that continues to be weak. The stock trades at a generous 22x this years earnings estimate. Place stop at $41.00

3) Arvin Meritor (ARM – 11.06) we will short 900 shares at the market opening price. Technically ARM has gained 3000% since depression was a foregone conclusion 11 months ago! ARM has rallied right into its down sloping 200 week average which has shown to be near term resistance. Fundamentally this auto parts maker, primarily for trucks, has been a underperformer for over a decade, with revenues per share falling 50% during this time. The heavily indebted company has a negative book value. The company is just returning to profitability. The future earnings picture is hazy at best. Place stop $12.3