As noticed in a previous post in the beginning of May, "Sell in May and go away!" was a good advice once again. The updated weekly chart above shows the weekly breakout above 1350 was fake and reversed the week before starting a deeper correction and perhaps forming a long term top. We notice the index broke the uptrend coming from the 666 March 2009 lows. The break occurred on the logarithmic scale chart only but usually it precedes the break of the arithmetic scale chart (see below), as well.
The index halted around 1370 where are 76.4% (38.2% x 2) retracement of the fall from the 2007 highs to 2009 lows and 161.8% extension of summer 2010 correction. The internal symmetry is indicative of a potential long term top set in May 2011 which could trigger a deep correction targeting at least the 1000 area (2010 lows and 38.2% retracement of the 2007 - 2009 plunge), thus retracing half the 2009 - 2011 recovery until sometime in 2012.
The updated daily chart below shows the potential 5-wave count which may be completed and the correction that ensued by breaking the uptrend (coming from August 2010) around mid May, as discussed in the mentioned previous post. The correction has touched the targeted rising SMA200 and approached this year lows and the bottom of the corrective wave 4 located around 1250. A break down through this area is extremely bearish and seals a long term top at this May's top around 1370. Nevertheless, the index may stage a rebound preceding the important 1250 area break down while a return above 1350 would suggest the top is not yet in place.