NEW YORK (TheStreet) -- The "sell in May and walk away" scenario remains in play as a June swoon looms. To confirm the May 20/May 22 highs as a major stock market top, the weekly chart profiles for the five major averages must shift to negative technically.

Negative weekly closes require that the Dow industrial average, S&P 500, Nasdaq, the Dow transportation average and Russell 2000 must have weekly closes below their five-week modified moving averages with declining momentum. My measure of momentum is a 12x3x3 weekly slow stochastic where readings are on a scale of zero to 100. All major averages have been overbought with readings above 80. In sum, we need weekly closes below the five-week modified moving average with momentum declining below 80.

At Thursday's close the momentum readings were 83.73 on Dow industrials, 82.22 on the S&P 500, 85.40 on the Nasdaq, 75.05 on Dow transports, and 81.96 on the Russell 2000. Note that momentum is declining below 80.00 on Dow transports.

The five-week MMAs are 14,968 Dow industrials, 1613.8 S&P 500, 3382 Nasdaq, 6276 Dow transports, and 964.83 Russell 2000. Dow transports will have a negative weekly chart today unless a rally causes a close above 6276. It may take another week or two of a June swoon for all five averages to have negative weekly charts, which would confirm the May 20/May 22 highs as cycle highs confirming the strategy to "sell in May and walk away."

My semiannual levels remain in the mix, but they become less relevant going into the end of June, because new semiannual levels for the second half of 2013 will be in play beginning in July. A reason for Thursday's rebound was that the Russell 2000 held its semiannual pivot at 965.51.

An important risk is the reversion to the mean which are the 200-day simple moving averages at 13,855 Dow Industrials, 1494.2 S&P 500, 3155 Nasdaq, 5608 Dow transports and 883.10 Russell 2000. Beware that all five major averages have crossed their 200-day SMA in every year of the new millennium except 2013 so far.

My annual levels have been tested every year in the new millennium and this year's annual value levels are; 12,696 Dow industrials, 1348.3 S&P 500, 2806 Nasdaq, 5469 Dow transports and 809.54 Russell 2000.

On May 2 I wrote, Bull Market Will End Without Big-Bank Leadership and the big banks led the way. On June 5 I wrote, Big Banks Face Limited Upside where I indicated that there were no buy rated banks among the 24 banks in the PHLX KBW Banking Index . The 13 components I profiled set multi-year highs between May 22 and May 31. Nine peaked on May 30 or May 31.

On May 8 I wrote, Record High Transports a Second Chance to Sell and Dow transports was the first major average to peak. The all time high is 6568.41 set on May 20. I have had the transportation sector rated "avoid-source of funds" as 77% of all transportation stocks are rated sell or strong sell.

On May 23 I wrote, Key Reversals Suggest Sell in May and in today's post I have described the conditions that would confirm those May 20/May 22 highs as cycle highs.

On June 3 I wrote, Discount Retailers Track Slow Consumer Spending and one of the stocks I profiled was Dollar General ( DG) who reported quarterly earnings pre-market on Tuesday. The retailer missed estimates by one cent earning 71 cents per share and lowered forward guidance. I consider this a warning for the US economy and the stock fell from $53.55 at Monday's close to a test of its 200-day simple moving average at $48.74 on a quick reversion to the mean.

On June 4 I wrote, Homebuilders Upgraded On Weakness where I stated that I was less optimistic about the housing market than the consensus and questioned the sustainability of the modest recovery. On Wednesday the homebuilder upgrades continued with Standard & Pacific ( SPF) upgraded to hold from sell. This homebuilder was the only sell rated name in this post. On Thursday Beazer Homes ( BZH) was upgraded to buy from hold.

The housing market is a key to sustaining an economic recovery but the PHLX Housing Sector Index is 9.6% below its May 20 high at 210.01 and a close today below the five-week modified moving average at 195.64 shifts the weekly chart profile to negative.

The closes today and next Friday are keys to confirming the May highs as cycle highs. Without negative weekly charts for all five major averages, the markets could again surprise with yet another rally to new highs. As I have been saying, if you can't confirm market highs, new highs will follow even though stocks are trading under a ValuEngine valuation warning.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at