The market picks up this week where it left off on Friday, with selling. The E-mini S&P 500 Futures (ES) appear to be heading toward 1308 or gap fill from April 19th.
I would have liked to see buyers push the market higher last week, but this further push down is not a big surprise. Even so, it is best to proceed with caution on the long side right now.
Manufacturing data in Europe and in China is making negative headlines and markets are down globally this morning. The fact that S&P downgraded Italy's credit outlook to neutral on Saturday has not helped sentiment.
I will consider long positions below 1308 on the ES today. "Sell in May and go away" is proving to have been good advice so far.
Although I continue to be bullish overall, I am planning for the possibility that the markets could consolidate for an extended period of time before resuming the overall up-trend.
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