The stock market is falling once again, with the S&P 500 (SPX) Index trading nearly 10 percent lower than its high just weeks ago.

In fact, that reaction high occurred this month so the “monthly” candle is creating a very big bearish reversal. You can see this on today’s “monthly” chart of the S&P 500 below.

This reversal also comes after the index briefly poked above (retested) the 23.6% Fibonacci level, also at (1).

A reversal of this magnitude creates a lot of overhead supply (areas where trapped investors will sell to break even). In any event, this reversal is bearish and active investors should use caution over the come weeks/months.

(Click on image to enlarge)

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