Stock Market -- Technical

The correction underway since 5/11 has wiped out the large short
term overbought, brought the market off a very substantial up
trajectory, and has knocked it off the positive trend line.

The 10 and 25 day m/a's are stilll rising and the 10 remains above
the 25, thus signaling that internal damage so far is minimal. The
SP500 has broken below the 10 m/a and is now sitting just above
the 25 m/a (Chart link below). An important test of short term
direction lies ahead this week -- Can the market stay north of a
25 day m/a?

The market remains substantially overbought on measures
running out from 6 - 13 weeks, so you have to allow for the
possibility of a further run-off in the wake of a 2 month rally.

The SP500 had a Fri. 5/15 close of 883. To me, the market remains
of interest if the "500" can close above 840 for the upcoming week
and 850 -855 in the following week. Breaks below the appointed
levels in either week would render this advance increasingly
suspect, as trajectory would no longer be consistent with a decent
intermediate term advance to run perhaps through June.

I have been cautious for the past couple of weeks, but the technicals
do not yet give me reason to be downcast about this market. So, I
plan to keep looking for entry points on the long side. SP500 Chart.