The trend looks like it is topping, not least because it is hitting against psychologically important 1,500 level. The index has tried to break above 1,500 in a meaninful way in the last 3 sessions but has not been able to. Meanwhile, the tops in the relative strength index (RSI) has been lower and lower. This technical divergence along with a jump in VIX support the notion that the S&P500 is ripe for a roll-over.
The index will not just roll-over on its own because so far it has been catching a bid on any weakness. There has to be a catalyst and there are quiet a few this week.
1) ADP Employment on Wednesday
2) FOMC statement also on Wednesday
3) Jobless Claims on Thursday
4) Chicago PMI also on Thursday
5) Payroll on Friday
6) ISM also on Friday.
7) Any weakness (for whatever reason) in the overseas markets.
Byron Wien Expects a Major Sell-Off
