Equities' chart patterns are tracing out a setup that can point the way much lower

Efforts to push up the markets today must have benefited from the "U" shaped "max pain" curve I mentioned, but still that gravity is weighing on the indices as the actual "max pain" levels are slightly below. So we'll see how the indices perform the rest of this afternoon.

From a longer term swing perspective, the pattern displaying across almost every index that I see - from BKX to DJIA to SPX, NDX, the transports, etc., along with many individual stocks (unlike my SWHC of course!), is one that alerts, look out - if the following day (Monday of course!) moves under and especially closes under today's low, then it establishes a bearish presumption. I've made a few simple markings on this intraday chart of the SPY (daily bars) showing levels to watch. First will be whatever intraday low and closing price we have today; then, Wednesday's low of day. There's chart support just above $88 in SPY, but if a bearish trend reasserts itself for the markets then of course we can see lower.

I did mark with a light green line the prospect that if the markets can push above that level, it can rule out a more immediately bearish setup. That's approximately at the 935 level that's a secondary resistance area for the S&P 500. It would be bullish if that level turned from resistance to support - I'm just not forecasting that the SPX will indeed get that high in any event.

Given that the pattern I am referring to is a trend reversal pattern, it does look like a bearish setup. One thing that helps is that the movement down since last week didn't have massively high volumes ... but they weren't light either. A movement under the 200-day moving average will be generally recognized as bearish too, of course. Other technical damage is showing up in various technical indicators, which we'll take a look at this weekend once the day's market action is done.