After the markets opened higher, a reversal took place. The selling has continued into the lunch hour which is a change in character. The key to the top on this market was a hit of the $133.30 level on the SPDR S&P 500 ETF (NYSEARCA:SPY). This level was a major gap fill from July. Even more importantly, if you connect the highs from 2007 and 2011, the trend line runs directly into the $133.30 level. Note the chart below.
If these reasons mentioned above were not good enough, CNBC has been pumping a golden cross on the daily chart as a signal the markets were going to surge higher. Taking the contrary view, which everyone should do when dealing with any media outlet that hypes the market, it was a sell signal.
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Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
