Looking at both charts above of the S&P500 (SPX), DOW, and Nasdaq, they have reached very important points that indicate the market is going to reverse and move downwards based on many technicals resistance levels:
1. Hitting longterm downward trendline
2. Retraced to 50% fibonacci line and could not move about that resistance
3. Formed evening doji stars (bearish candlestick pattern) and double tops
4. DOW at top of upper trading range
5. Negative divergences (higher highs in the market but lower MACD)
6. Markets in overbought levels
7. Possible head and shoulders formation on the SPX (forming right shoulder). Lets see if this comes down to test the neckline. If there is a break, could be a lot of trouble.
All this these are bearish indicators, short term and longer term technicals. Lets see how this plays out but I am expecting a 3-4 % correction in the short term.
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