Here's the latest weekend update from Serge Perreault, a Chartered Accountant and market technician located near Montreal, Canada. Serge anticipated the correction in the S&P 500 in his last post from a week ago, which included a couple of downside targets: -3.3% and -5.7%. The index is now 6.6% off its interim high. Thus it has fallen below the technical support level (A on the chart), which was around 1085.

Serge's latest chart updates his weekly view and highlights the downtrend support and resistance from the market peak in October 2007. Now that the index has broken support, the apparent uptrend that Serge annotated last week (the B line in the chart), appears to be an up-cycle within the larger downtrend.

In the email accompanying the chart, Serge explained the difference between trends and cycles:

In technical analysis, there are three types of movements: uptrends, downtrends and "no-trend" sideways movements. I refer to up and down movements within a trend as "cycles." This explains my description of the S&P 500 as being in an up-cycle within a downtrend.

Click the chart for Serge's full commentary.