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This column was originally published on RealMoney on Aug 9. at 6:58 a.m. EDT. It's being republished as a bonus for readers.

Monday was a key day. The

S&P 500

broke below the March high of 1225, suggesting a failure on the recent breakout to new swing highs.

Additionally, as the chart below shows, the S&P also turned its three-day chart down (for the first time in a long time) by tracing out three consecutive lower lows.

(The behavior of the three-day, three-week and three-month swing charts and their importance, among other swing-trading techniques, will be explained in detail at the upcoming seminar in Las Vegas in early October that I and Dave Reif will be conducting.)

Note how the overhead 20-day moving average on the S&P marked resistance early Monday, confirming the short-term downtrend.

The next stop looks like a test of the 50-day moving average near 1215 S&P.

If that level is lost, last-gas support at 1190/1200 comes into focus.

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The notion of a significant top in this time frame that I've been looking for appears to be underscored by the price action of two leading groups -- the housing and retail sectors -- as shown in the charts below.


: After three days down off the top, if the bulls are out there, a strong rebound attempt would normally be expected.

If it does not occur, and I am not at all convinced it will from this level -- I would then expect to see another three days of weakness before any such rally attempt.

(In the S&P Retail Index chart a little lower on this page, please notice the sharp angle of attack to the downside in retail, a leading sector. Also, note how it is perched on last-ditch trend line support

A and B, with a test of its 50-day moving average not far below.)

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Jeff Cooper is the creator of the Hit and Run Methodology and the author of the best-selling books

Hit and Run Trading (The Short-Term Stock Traders' Bible),

Hit and Run II (Capturing Explosive Short-Term Moves in Stocks), as well as a video course, Jeff Cooper on Dominating the Day Trading Market. He also created the Hit and Run Nightly Reports and co-founded a trading markets Internet site.

Mr. Cooper is also a principal at Mutual MoneyFlow Management, a money management firm that is a registered investment adviser. MMM and its affiliates may, from time to time, have long or short positions in and/or buy or sell the securities or derivatives thereof, of companies mentioned in Mr. Cooper's columns. In such event, appropriate disclosure will be made. None of the information contained in Mr. Cooper's columns constitutes a recommendation by Mr. Cooper that any particular security, portfolio of securities, transaction or investment or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. While Mr. Cooper cannot provide investment advice or recommendations, he appreciates your feedback;

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