I've received some additional comments from Serge Perreault, reflecting on the S&P 500 over the past month. He writes:
Charts told the story again as weakness started to show as far as my Apr.23 charts:
Apr.23: Index "squeezed"
Apr.30: Formation similar to the previous 2 corrections
May 7: Supports broken
May 14: Index between its 2 MAs (34 points away)
May 21: At 1087, back below its 2 MAs and its 2007 downtrend resistance
What now? Under the best scenario, the index would break the January resistance of about 1155 (+6.2%), thus resuming its uptrend from March 2009, but it would still be challenged by its 50-day MA of 1171 (+7.7%) and the April resistance of about 1200 (+10.4%).
Under the worst scenario, the index would break down its February/May support, just like the Dow Jones World Stock Index did this week [second chart].
Click both charts for a close-up view and Serge's annotations.
Note: For newcomers to technical analysis, here are brief explanations for the two key indicators that Serge includes:
