$SPX Update for 05.25.2008

S&P 500 index - $SPX

Monthly chart shows weakness, as the bulls were overcome by the bears as the market approached the 50sma. We are now well into the third week of the month, and the index is now trading below its open for the month of May 2008.

Weekly chart shows a large bearish engulfing candle pattern, indicating that investor sentiment has changed. Index has now closed below all of its key moving averages. Look for a retracement of the last move up off the March low.

Daily chart shows a couple of dojis off the 200sma resistance, indicating indecision between the bulls and the bears. The open the following day gave a hint as to the true direction, as traders/investors gapped down the open in their haste to close/exit their long positions. Look for a retracement of the last move up off the March low. The whole up looks like consolidation. IF the last move up is indeed consolidation, THEN look for eventual lower low to be made.