[Spoiler Alert: The key is 2750.52]
The MONTHLY chart is ugly.
UGLY.
Al Brooks, on 5/25, called it a “perfect double top” as it traded below the previous month’s low.
Also an “outside down month”.
“But, after 4 consecutive bull bars, this is a low probability short. Consequently, the reversal down will probably be minor. Traders will expect a 1 – 3 month pullback and then another test of the all-time high.”
Today (6/1) Brooks says: “…if June trades below the May low it will trigger the sell signal for the double top.” [As Friday’s low was 2750.52, and we closed at 2752.06, we could blink and trigger that sell; it’s not a stretch.]
Hello bulls: he estimates that in 60% of the instances, even if it breaks below the neck line of the double top, the break usually fails and the market continues its trading range.
So, that leaves us a 40% chance of a breakdown. For bears, he guesstimates a visit to the March low ~2726, or deeper…a 10% correction to ~2650 [rarely a straight line down; bounces can be violent].