For over three weeks equities have been pulling back from the high on April 20; a high that tested the same level seen in the S&P 500 at the August and November highs - 2,110. A break of 2,033 will confirm that the herd has turned. The 200-dma and horizontal support converge near 2,012-2021. However, a break of 2,040 will trigger a bearish head-and-shoulders pattern that measures a minimum decline to 1,970.
A 14month cycle low is due in May/June and should be pulling equities downward but in the eighth year of a Presidential term, following an April high, equities typically get a bounce from mid-May into early June. That bounce is followed by a long decline into Nov/Dec.
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