The U.S. stock market is running up against a few major headwinds. These headwinds will likely cause the S&P to fall below 2000 again in the short term. Here are the 3 headwinds.

The 200 daily moving average

There is a common pattern among all big U.S. stock market corrections. When the U.S. stock market's bottom is in, it almost always makes a big retracement after the S&P 500 rallies to its 200 daily moving average.

This is typically the first pause in the emerging rally. Since first pauses are usually the biggest pullbacks, this retracement can usually fall to the 61.8% - 76.4% fibonacci retracement level.

The following charts illustrate that big 61.8% retracements usually occur when the S&P first rallies to the 200 daily moving average.

This chart shows the big correction of 2010. The S&P retraced almost 76.4% after it rallied to the 200 daily moving average. Notice how the S&P overshot the 200 sma for a few days before falling below that moving average.

This chart shows the big correction of 2011. The S&P surged past the 200 sma for 1 day and then instantly reversed down. It retraced exactly 61.8%. The interesting thing here is that the S&P actually pulled back from the 200 sma resistance twice instead of just once.

This chart demonstrates the big correction of 1990. The S&P almost reached the 200 sma - it fell shy by just 1 point. Then it retraced exactly 61.8% before rallying to new highs.

As you can see, the S&P sometimes overshoots or undershoots the 200 daily moving average before retracing 61.8%. That's why many traders believe that the S&P will rally to 2070 (10 points above the current 200 sma) before retracing 61.8%.

Today's price action is actually very bearish for the short term. After consolidating in the 2020-2035 range, the S&P gapped up today and almost reached the 200 daily moving average, which is at 2060 right now. This is a very common pattern that occurs before the S&P is about to retrace 61.8%. Should the S&P reverse down tomorrow, today's daily bar will look like a reversal "hammer pattern" (candlestick pattern).

Q3 earnings season is mostly over

Q3 earnings season has mostly come and gone. We only have a few earnings reports left, and those are primarily in the technology sector. There's a very interesting pattern that's been going on this earnings season.

Some earnings reports have been terrible while others beat expectations. Regardless of whether it beat or missed expectations, most stocks have gone up on their earnings reports for a few days!

After rising on their earnings reports, most of these stocks have made flat tops and ceased to rise. In other words, the S&P 500 index is rising due to the rotation of these individual stocks. With earnings season mostly complete, there are very few individual stocks that can push the S&P 500 index higher. If individual stocks aren't going to push the index higher, then they can only push the index lower.

The U.S. dollar is going higher

Correlation between the U.S. stock market and the U.S. dollar has been pretty strong this year. After consolidating for many months, the U.S. dollar is finally ready to break out higher from its bull flag pattern.

A stronger U.S. dollar is bearish for the U.S. stock market in the short term.