S&P 500 Now Down 5% in May

Remember that old investing adage, "Sell in May, and go away?" For such a simple-minded nugget of advice, it sure has proved prescient in recent years. With the S&P 500 trading very moderately lower on Wednesday, the widely watched barometer of the American stock market has now shed just under 5% in the month of May alone. Given that the month is barely half over, the correction is starting to feel pretty painful - 5% is a lot to lose in 16 days. The elections in Europe, renewed fears over Greece and Spain, and JP Morgan's recent $2 billion trading loss have all weighed on sentiment in May, and given the persistent selling pressure, things might get worse. The good news is that the S&P is still up roughly 5.66% on the year, but at the current pace of losses, this could potentially be wiped out by June 1. So, is it too late to follow the wisdom of "Sell in May, and go away?" No. While this could just be a correction, ominous undercurrents are starting to show up at the macro level, and these are being reflected in the charts. The S&P has sliced through a number of near-term support levels and the path of least resistance continues to be down. The SPDR S&P 500 ETF

is now trading 3.18% below its 20-day moving average and 3.72% below its 50-day. The 200-day moving average will come into play roughly 5% lower from current levels. On Wednesday, the market has been unable to hold onto early gains, and the selling is coming on heavier than usual volume. All of these signs may be pointing to more losses ahead for the U.S. stock market.