For the coming week watch.......SP500-1292 level.

The FED induced rally appears to be coming to and end and the correction that has been over due for months is now upon us. One of the problems with kicking the can down the road is that one day the small problem that started it all has grown to a beast that's almost impossible to corral. The chart below is an overview of our forecast shown in the past posts. So far its right on track. The market has now moved into an oversold condition that may spawn a rally. The norm would be for a short move up to work off some of the oversold condition and then a resumption of the downward spiral. The wall-street bankers know that if they don't get in here with buying support and push the FED to muster one more QE attempt, this market could get away from them in a hurry. That the FED and the Wall Street zombies can actually muster a coordinated effort is purely speculative at this time.

The chart below will give you an idea of where the key resistance levels are for the short term and why they are important. The first and major level to watch is the 1292 area. The market ended the session just above 1292 after touching late in the day. 1292 also happens to be the 38% Fibonacci retracement level and combined with all the trend lines and longer time frame resistance levels  (12 month moving average is also 1292) that run through that area make it a critical level to hold come Monday.

Here's another very important indicator flashing a major warning signal. The VIX index (monthly) is starting to rise and it has broken through the first key level at 20. Remember the VIX runs inverse to the market. When its rising the market tends to fall. When its falling the market usually is rising. The red arrow on the right side of the chart shows market direction which is red for falling. This move in the index means we are likely in a major move lower as the complete mood of the market is changing to a bearish bias. Note the red indicator in the lower window of the chart. It has made a lower top while the SPX500 index in blue made a higher high. This divergence is setting up a top for the market.

Here's a chart from the "Stockcharts" newsletter. It shows the performance for the key ETF sectors in the SP500 index for the first two weeks of May.  No place to hide at the moment. Cash? Stay safe.