Market Analysis for May 17th, 2004

After last week's basically sideways action and despite Wednesday's massive upside rally that most everyone thought would lead to upside continuation and the establishment of a significant low for the February-May declines, surprise, surprise, the markets gapped down in a big way this morning. They made new reaction lows for their declines, and suggested, to me anyway, that the downtrend is still very much alive and well and dominant.

In the E-mini June S&P, for example, while the Nasdaq indices did make new lows, the E-mini S&P tested last Wednesday's low, which was at 1075