Happy Friday folks. It may have been a shortened week, but I'm willing to guess that getting to the weekend is still just as sweet as it is when we've just wrapped up a five-day workweek. Anyway, yes - we've got some thoughts on today's action, and some thoughts on the way the market became less and less exciting as the week went on. In fact, the waning volatility is the story. I have to give credit where it's due. See the nearby chart of the S&P 500? I 'borrowed' it from today's edition of the SmallCap Network Elite Opportunity newsletter. Normally I don't like poaching other people's stuff, but since I'm not going to give you the full analysis the SCN EO gave its readers, I figure it'll be alright. Anyway, the story here is the wedge shape the S&P 500 has been working its way into all week long. This hourly chart is "as of" about noon today, though some things have changed since then. Some people will chalk up the narrowing trading range to the looming weekend, since trading activity slows as people get closer to the end of the week. And truth be told, there probably is some of that happening now. Honestly though, I still think most traders are still unsure of what's in store for June and beyond, and as a result are choosing to do nothing. Either way, as John Monroe of the SmallCap Network Elite Opportunity put it: "Usually, when the wedge finally breaks convincingly to either side, it's often a prelude to a major move. However, I've seen on a number of occasions where the triangle breaks one way, gives traders a big head fake and then breaks the other way and continues in that direction for quite some time. So, we're not going to be too overly concerned about which way it breaks, as much as we want to see what happens on the heels of that break.... Right now, it appears the triangle wedge here is leaning to the downside. You can probably notice the same thing. I am absolutely certain we're going to see a convincing break of this wedge at some point next week if it doesn't happen today, which is doubtful." I can't tell you the rest of what Monroe gave to SCN EO subscribers in the way of analysis, but you can kind of see where he's going with it. I can also tell you that the S&P 500 broke under the lower (support) side of the wedge. If you want to know the specifics of what he plans to do about it, my advice is simply to subscribe to the service. And, I highly recommend that you do. These guys have not only been knocking it out of the park with some of their recent stock picks - like a 70% gain on Advanced Micro Devices (AMD) and a so-far-unrealized 25% gain on Career Education (CECO) - but they've also had their finger on the pulse of the market like you wouldn't believe. I can't recall a move the market's made recently that the SCN EO didn't see coming. Or, you can sit on the sidelines and let everybody else make tons of money thanks to the Elite Opportunity service. Your call.' Check it out. Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=SCN+Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/ As for my observations today, like I mentioned to you above, the S&P 500 broke under that the key support line of the recently-developed wedge. That dip also pulled the S&P 500 under the 20-day moving average line, which had been holding it up for the better part of the last week and a half. Now that it's broken, it'll be much easier for the bears to beat the market down further. Underscoring my bearish view on things is the fact that the volume behind today's selling was strong, and that the VIX pushed its way above its upper Bollinger band and on to new multi-week highs, Like Monroe said, the market's fully capable of acting like it's going to break down, only to move right into a rally.... which will end up fooling as many people as possible. The more I look at this chart though, the more my already-bearish expectation gets entrenched in my head. The key from here will be seeing what happens when-and-if the S&P 500 retests its 20-day line by approaching it from underneath. There's no telling when it will happen, But, we strongly encourage you to keep reading next week. 'cause this is the point where things really start happening. Side note: Though the momentum is technically bearish, there's a lot of support around the 1600 area. It wouldn't totally shock me of the bulls made a stand there. We'll dissect that when the time comes though. Next Week We mentioned in yesterday's newsletter that earnings season is all but over, with 93% of the S&P 500's companies having already reported results. For what it's worth though, we do have four more companies with numbers on the way next week. Of the four, the only one I think worth worrying about is Dollar General (DG), and that one only because I suspect it'll tell us more about how consumers are feeling right now. We're still not seeing a lot in the lineup in the way of biotech or pharmaceutical news. But, we do have one news nugget on the way for the coming week - Celgene (CELG) has a PDUFA date for REVLIMID, which is a treatment for multiple myeloma. Although several of the more recent FDA-driven announcements have lacked impact, this one is kind of a biggie. Multiple myeloma is the second-most common form of blood cancer. Over 750,000 people are affected by it at any given time, on a global basis. The market was worth about $5 billion last year, and some say it will be worth more than $7 billion by 2020. REVLIMID has pretty good odds, too. The Food and Drug Administration has granted it an orphan drug status as well as a fast-track (priority) review status, meaning (1) there's currently not a drug that treats the disease adequately enough, and (2) the need for a treatment is seen as urgent. REVLIMID won't even have to perform superbly for the FDA's oncological drug reviewers to see at in a positive light. Anyway, Wednesday, June 5th, is the day any Celgene shareholders will want to mark on their calendar (though anyone looking to trade the news may actually want to take their position by the end of Tuesday, June 4th, in case the news rolls out before the market opens). As for economic numbers, while we've got a lot of 'em lined up, but the only ones that really mean something will center on the current employment picture. That's the unemployment rate on Friday, which will be accompanied by the number of payrolls added in May. Last month we got some surprisingly-good news on the jobs front, though it remains to be seen if that was a one-time fluke or truly the beginning of job growth. We'll know a week from now. If you want an early glimpse of what we can broadly expect from the government's numbers on Friday, the ADP employment change figure will be unveiled on Wednesday. The ADP number has been a pretty good barometer for the DOL's number lately, so let's assume that relationship still exists. In the meantime, the weekend is here, and it looks like most everybody is due for a little good weather. Let's all make a point of getting out and doing something fun. There will be plenty of work, trading, or whatever left to do come Monday. Before you totally log off and say goodbye for the weekend though, don't forget to check out your special offer from the SmallCap Network Elite Opportunity.