Bearish thoughts...

The first image below is of the weekly SP500.  Notice the bearish outside reversal bars.  The first back in late April and then the most recent one.  Very similar looking if you ask me.  The second image shows the signals produced by my system.  I should mention when the dates are colored green, the market is considered to be healthy.  When it's red, the system is in "unhealthy" mode. Depending on the mode, different code is used to generate signals.   When healthy, the system will mostly buy the dips.  When unhealthy, it will primarily sell or short rallies.  The column on the left shows what happened in April.  On the 27th, the market tanked and became unhealthy.  As is typical when the market has been in a strong uptrend and is undergoing a topping process, it snapped back up quickly by the 29th, but the damage had been done. Consider the similarities to the most recent action.  Longs were produced both days the market flipped to unhealthy.  The market bounced 2 days later on both occurrences, and sell signals were generated.  That brings us to where we are now.  If the similarities continue, we might see some whipsaw action this coming week, with the trend turning downward.  Any more strength, and we will probably see a short signal.   Of course, there is a chance we'll go up and test the most recent highs, but odds are slightly better that we've seen at least a short term (or even intermediate term) top.

Click to enlarge...