During the last few months, the US stock market has had a deterioration of internal momentum. Something similar happened in 2015, except then the US main stock indices went sideways forming a double top.
The daily S&P 500 (SPX) chart courtesy of Trading View illustrates the action from 2014 to 2016.
The SPX made its high on 05/20/15 declined, then trusted up to a secondary top on 07/20/15 which was also the Nasdaq Composite (IXIC) then all-time high. The IXIC was the only one of the three main US stock indices making a new high, this is what I call a bearish rule of the majority signal. The truth of the market is with the non-conforming indices.
Subsequently, there was a mini crash. Note, the bulk of the decline took only a few trading days.
The current US stock market could be vulnerable to a 12 to 15% mini crash sometime between late August and late October 2021.
The next blog will examine momentum and price patterns of the current US stock market.