May Day or Mayday?

S&P 500 chart

Chart by Steven Sarnoff, h/t stockcharts.com

Stocks rebounded throughout the month of April.  The month ended with the market reaching a natural technical retracement level.  May Day not only started the new month, but May may see selling pick up to drive price lower over the weeks ahead.

Former support (demand) often represents new resistance (supply).  You can see on my weekly chart of the S&P 500 ETF (SPY), that price backed down after encountering the negative influence of a line of average price movement.

The character of the behavior of market price movement shows sellers regaining the edge.

Don’t be surprised to see the March lows taken out.

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Stay safe.

Best regards,

Steve

 

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