Look out below...S&P setting up for fall.

Remember that overbought condition I mentioned in the broad market...how an important oscillator was extended and due for a pullback...well here it is finally crossing down from a high level. With the longer term momentum still falling in the weekly chart and the short term now turning down, it appears the broad market is heading for lower prices. The area of the 200day moving average should be the first battle ground (call it 1295-1305) but it is likely to be just a pause towards lower prices. Ultimately this leg down should settle somewhere in the low 1200's.

Keep a close eye on the momentum indicators and continue to play from the sell side.