Editor's Note:

It was an ugly week. The S&P 500 and several indices have produced a bearish reversal pattern on both the daily and weekly charts. The pattern on the weekly chart needs confirmation.

Evidence seems to be building for a double-dip recession in the U.S. but until we see the S&P 500 break down under support at the 1040 level there is still hope. Even if stocks do rally the S&P faces heavy resistance near the 1150 area and a failure there would look like the right shoulder to a very bearish head-and-shoulders pattern.

One very possible scenario is the market churns sideways in the 1040-1100 zone until we see the next Jobs report on July 2nd or until we hear the first week or two of Q2 earnings (middle of July).

We need to be very cautious when it comes to launching new long-term trades. We did see WYNN jump from the watch list to the play list and I have added two more watch list candidates tonight.