"Price is King, Volume is Queen"

The title is from Mr. Wang of WangHappyTrading or MyHappyTrading. I give an example that exactly defines the meaning of the title. Today as I scanned through charts I wanted to make a note of what is happening to the S&P 500. The SPY ticker weekly chart is shown below.
As of now I am short the index since last Monday, 2-1-10, but after yesterday's amazing push upward in the final hour of the index I have become a little scare. My goal in this blog entry is to trying to get myself out of that worrying mode and anticipate what next week will bring.

The chart illustrates how much the market has gained in all of '09, but the previous four weeks the index has been trending lower. To confirm the most recent descending trend the volume has ramped upward week after week. Furthermore the gains in '09 were generally increasing in price while volume was decreasing. It looks I am trading in the trend that seems to be going down, but anything is still possible for the few weeks to come.

On the chart I also marked a somewhat similar descending trend that occurred in the beginning of '07. The index actually end up even though the trend was down initially for four weeks while volume also picked up. In a very similar situation we are in now, I think it a similar pattern may shape out again 2-4 months down the road. If next week the volume picks up but the index is flat or rising, I plan to exit my short positions.