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NEW YORK (TheStreet) -- While writing an article about stock buys near 52-week highs, I noticed many of the stocks I reviewed are overbought based on technical analysis. As a result, they were left on the cutting room floor.

I won't include stocks when the chart pattern appears overbought. One company that didn't make the cut was

Chimera Investment Corporation


. In the case of Chimera, I'm not convinced it should be shorted. But if you own it, you may want to take some of your gains off the table.

If Chimera shares retrace you can always buy them back and reduce your cost basis. Don't get carried away, though. Unless you're in the market full time, market timing probably isn't an exercise in which you want to engage.

After reviewing more than a few stocks with an overbought status, I decided to take a closer look at the overall market and especially the

S&P 500 Index ETF



On Monday, the SPY's chart formed a bearish indicator used by market timers. My daily SPY chart has a "13" above Monday's price bar. The 13 stands for a completed DeMark Sequential indicator on the bar. The indicator alone is not enough to start a trade for me; however, the SPY is also breaking through support on the weekly chart.

Combined, the two indications build a compelling case for shorting the market. In a normal, not-manipulated-by-the-government market, I wouldn't hesitate to call this a short. Today is the last day of April, and the adage of "Sell in May and go away" is in my thoughts, too.

>>Also see: IBM Buyback Proves Warren Buffett's Math >>

Last year, I didn't believe selling In May was the right call. I wrote about last May in

"Don't Sell -- Hedge In May and Go Away"

, and that was the right call. Investors who sold calls against their shares earned option premium while lowering their risk, all without actually selling shares.

This year is slightly different. This year we conjoin "The Affordable Care Act" (ACA), better known as "Obamacare," to the mix of market movers.

We have three principal drivers in the market. The first is obviously the government with quantitative easing. Interest rates are artificially below the fair market value stimulating housing in particular and the overall economy in general.

The second hasn't fully impacted upon the economy yet, but you can expect the ACA to thwack payrolls by the fourth quarter of this year. However, I don't imagine the impact of the ACA will be as incendiary as many claim -- not because the ACA isn't an unmitigated weapon of mass financial destruction, but I forecast the ACA becomes significantly watered down from its current form. The ACA is so ruinous in its current form that even

Congress is waking up to the reality of the negative impact.

The third key driver is the cost of energy and, in particular, the price of oil. I have many articles about why oil will continue to fall in price, including this one

"Forget About Fracking, the Gulf May Lead Oil Lower."

Falling energy prices is a bullish catalyst for the economy and the market should not be discounted. It's a tremendously big deal on par with any other catalyst in the market.

Taken as a whole, with the chart and the fundamentals, I think the odds favor a retracement in the

S&P 500

, but instead of shorting the market, the best course of action is to remove some gains off the table and prepare to buy the shares back on a dip.

>>Also see: The Financial Education Our Kids Deserve >>

One way to take gains off the table is through the use of options. For example, if you currently have 1,000 shares of SPY, maybe sell covered calls on the shares you would otherwise sell. By selling the June $150 strike calls that are deep in the money, you have about an 85% chance of the shares being called away.

You can acquire, at the time of writing, about $10.20 in premium, for a sale price including premium of $160.20, almost a full dollar above the current market price of $159.38. If the market falls by greater than expected and the SPY is trading below $150, you gain $10.20 in time premium that lowers your cost basis and risk.

At the option expiration date, you can reassess the market and decide if you want to cut back further or if it's time to add on more exposure. You will have greater clarity of what to expect from the ACA and if the

Federal Reserve

is slowing down the printing press.

At the time of publication the author had no position in any of the stocks mentioned.

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This article was written by an independent contributor, separate from TheStreet's regular news coverage.