The period May 4-5 is due as an important cycle turn. It is often difficult to interpret in advance whether such a cycle date will be a low, a high, or an acceleration of the trend -- but it should be one of the three. In the current instance, we are looking for an acceleration in the decline of the equity market toward an objective in the S&P 500 of 1209, and a likely minimum objective in the DJIA of 9109.

If this were to occur straight away into the week of May 18, people will likely call the move a crash, but it would simply represent the culmination of our intial decline, to be followed by a substantive bounce, but further weakness later on in the year. The charts below put the S&P in some true perspective both on a monthly basis and a zoomed-in daily basis. The Fibonacci rhythm is clear. When people talk about a tough April, one realistically must respond: the real volatility hasn't yet begun.

Chart produced using Advanced GET End-of-Day

Chart produced using Advanced GET End-of-Day

Meanwhile, this equity weakness should be just great enough to turn the U.S. dollar lower (we are now at the top of our target band basis the Deutsche mark chart -- the bottom of our target band for the euro). The upmove in gold and gold shares that started smartly two days ago should also continue. (We argued on these pages last January that gold would likely stultify until May 4-5 and then break significantly higher -- and so it seems to be.)

After all the gyrations of early 2000, the Nasdaq and DJIA are now back in synch as of today -- both down 9% for the year. They are likely to stay that way as a potential iii of 3 of I wave down arrives.

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