The U.S. stock market is possibly showing a failed double top. There are many headwinds facing the U.S. markets over the next couple months and we are entering what is expected to be a weak earnings period. Additionally investors are becoming complacent as seen by the low VIX. We may expect a short term retractment in the SPY of between 3% to 5% over the next couple weeks.
If corporate earnings fail to meet expectations and the VIX moves higher we might see a larger correction in SPY in the neighborhood of 8%. This would represent a Fibonacci retractment of 61.8% of the move from the June 4th low to the September 15th highs.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: This information should not be considered a recommendation and investors should consult their own investment adviser before making an investment decision.