The SPX broke down yesterday and closed the gap created by the French elections. Now what happens?

The market has quickly gone from short-term over-bought to short-term over-sold.

The number of new 52-week lows is elevated. The list of new lows is dominated by cyclicals, but also includes retail REITs, energy and transports.

The bullish percents are pointing lower, although the Nasdaq bullish percent doesn't look too bad.

Bottom Line: There is no doubt that the market up trend has broken, but I am not sure what happens from here. Will we get a significant sell off or a sideways consolidation? The indicators are mixed.

The Leader List

EEM dropped off the leader list. The political problems in Brazil were mostly to blame, but weak commodities also contributed.

All the oil related emerging market ETFs were weak, but the Asian countries remained strong such as South Korea, China and India.

US Treasuries are performing very well as they usually do while the market is under pressure.
 

The Semiconductors just don't want to quit, and the index is still well above the 50-day.

The internals are good. The PMO index, the bullish percent and the number of new lows are all showing strength.

Small Caps are moving sideways and have been caught in this range for about six months.

The internals are weak based on the PMO index, but the other internals such as the bullish percent and the number of new 52-week lows are holding up.

Brazil had a very bad day in addition to experiencing a double top.

Outlook

The long-term outlook is positive.
The medium-term trend is down as of May-17.
The short-term trend is down as of May-17.