The U.S. stock index bears have gained some downside technical momentum this week, following last week’s bearish “key reversals” down on the daily charts. A key reversal down occurs when a market scores a new high and then backs off the same day to produce a higher high and a lower low than the previous session’s trading range. Key reversals are a chart clue of a trend change set to occur in a market. See, too, at the bottom of the chart that the Moving Average Convergence Divergence (MACD) indicator is also in a bearish posture as the blue MACD line is below the red trigger line, and both lines are trending lower. This week’s selling pressure in the U.S. stock market, combined with last week’s key reversals down, are the strongest evidence seen in some time that the stock indexes have put in near-term market tops. Stay tuned!–Jim
