thumb_5.7.10_index_spx_m_--_s__p_500_indexWe get the retest of the 1170 breakout (see the last month's article), unfortunately it failed and in a spectacular way. SPX (monthly chart) held the 10 month moving average on Thursday's collapse, but we closed the week below 50% 2007/2009 (1121). What is interesting about the longer term charts is that we could be building the right shoulder of an inverted head and shoulder, a retest of the 2002 lows over the next months. That would imply a sideways to bearish market all the way into 2011, setting up the beginning of a new bull market just in time for the 2012 elections. It's far too early to call for that scenario, but it is one that could play out if bulls fail to step up to the plate. The immediate must hold level is 1097. A close on volume above 1121 would give bears pause, a move above 1170 puts bulls back in firm control. Until then, tread carefully.