* Short positions fall 0.2 pct on NYSE, 1.3 pct on Nasdaq

* NYSE short positions down 19 pct since July 2008

By Edward Krudy

NEW YORK, May 27 (Reuters) - Short interest on the Nasdaq and the NYSE edged down in mid-May, the exchanges said in their twice-monthly reports released on Wednesday, indicating investors are continuing to move out of short position as the stock market show signs of strength.

On the New York Stock Exchange, short interest fell 0.2 percent, while on the Nasdaq it fell 1.3 percent

"It's been a yo-yo year for the short-sellers," said Harry Strunk at Treflie Capital Management in New York. "It's going to take this market slowing down a lot and running out of gas before you see short interest back in."

The S&P 500 index is up 32 percent since hitting a 12-year closing low on March 9, with the rise in stock prices causing short-sellers to close out positions to avoid mounting losses.

"They're licking their wounds right now and they're going to be cautious going forward," Strunk said.

On the NYSE, short position have fallen around 19 percent from 18.6 billion shares in the middle of July 2008, a peak in the last 12 months.