POSSIBLE Major Pattern Completion in Stocks

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The weekly charts of the major indexes are now overbought with some bearish divergence which will be significant if the weekly MACD makes a bearish cross.

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The S&P 500 (SPX and SPY) made bearish engulfing patterns on the weekly chart last week. This is a possible bearish reversal candlestick. Also, there was a multi-decade high in buying climaxes which is a new 52 week high followed by a close below the previous week's close.

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While it seems foolish to even suggest such a thing right now, I see this current high as a possible major upward pattern completion based on the continuing labeling which I have built on for the last year. I made these charts this past weekend, so it does not include the last couple days in there, but they do give a tiny bit of confirmation of this idea. Basically the market needs to decline about 11% for me to have much confidence that this bull phase is very likely done. The biggest decline since last March is 9%.

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Again this chart was made this past weekend, so it does not include the last couple days, and that may change some things. On the daily chart, the US dollar looks ready for a consolidation or decline. However, the weekly chart is not really overbought, at least on the MACD.

Based on today's advance, it looks less likely that a pattern is completing, even of a smaller degree. There is one other way that I could conceive to label this in larger context. That would put the price currently entering a VERY strong phase up in the US dollar and would actually imply some type of dramatic decline/crash in the EURO over the coming few weeks. Given some of the things going on now, that is not out of the realm of possibility, but we should know in the next couple weeks whether that has any merit.

In any case, this past summer and fall I went over ad nauseum the reasons to be positioned for, or at least anticipate, a major US dollar advance. I don't see any reason at this point to bet against the weekly and monthly uptrend of the US dollar.