It was a rough week for the stock market, and the technical action favors further weakness, writes MoneyShow’s Tom Aspray. In this type of environment, he prefers a patient approach, but does see a new opportunity in the SPDR Gold Trust (GLD), which appears to be bottoming.

Last weekend’s headline in The Wall Street Journal, "Dow Notches Biggest Weekly Gain in Month,” may have encouraged some to buy, but hopefully not at Tuesday’s highs. The Dow Industrials closed Friday down 2% from those levels.

By the end of the week, the selling was broad-based, as the Spyder Trust (SPY) was down 1.9%, the PowerShares QQQ Trust (QQQ) lost 2.9%, and the small-cap Russell 2000 (IWM) was also down 2.9%.

Things could have been even worse: if you became enamored with your Keurig coffee maker over the weekend and decided to buy Green Mountain Coffee Roasters (GMCR) when it opened last Monday, you were in real pain

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The weekly chart of Green Mountain shows that it peaked last September at $115.98, then dropped to a low of $34.06 in November. The relative performance, or RS analysis, turned negative in October, when GCMR was at $92.

Despite February’s rally, in early April, both the RS line and the on-balance volume (OBV) were already breaking down, which warned of an earnings disappointment. The stock was down over 48% for the week.

As I go into more detail later, the stock market is likely to be under further pressure this week. It will be important to see how the market reacts once we get down to the April lows.

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Early last week, there were some positive signs in the economy. The ISM Manufacturing Survey (chart on left) rose to its highest level since last spring. New orders accounted for most of the gain, which is a positive, as was the slight decline in inventories.

However, construction spending numbers, also released last Tuesday, were weaker than expected. The market was also surprised by the weak numbers from ADP, as they reported only a 119,000 increase in jobs. The sharp drop in the ISM non-manufacturing composite (chart on right) added to the market’s concern, helping push the market lower heading into last Friday’s jobs report.

Even though the monthly jobs report showed a slight decrease in the unemployment rate, the number of new jobs was much lower than expected. It has raised new fears that the economic recovery is losing steam.

In particular, construction employment has barely rebounded from the early-2011 lows. If the May report (to be released on June 1) is also weak, it would send an even stronger warning.

In terms of data, the markets will get a rest this week, as jobless claims and international trade numbers do not come out until Thursday. On Friday, we get the Producer Price Index and the University of Michigan’s consumer sentiment survey.

Of course, over the weekend, elections in France, Germany and Greece are likely to bring the Euro debt problems back into focus. The ECB left rates unchanged last week, which disappointed some who were hoping for another rate cut to help their floundering economies. The pro-austerity stance of the ECB is clearly a factor in the elections.

As I pointed out on April 13, the German Dax index broke below its March lows in the middle of April. This was confirmed by the breaking of the uptrend in the blue-chip Euro Stoxx 50. Therefore, we need to watch our market even more closely.

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Tickers Mentioned: Tickers: SPY, DIA, QQQ, IWM, SH