Hold on to your hat, the S&P 500 is in for a ride
The S&P 500 index has been used as a measurer on US economy, for a reason. The diversification of the index has made it ideal for a broad statistical evaluation of the US market. The last weeks have been difficult for the US market, and the world as a whole. The US sub prime crises have had an impact way outside of the US borders, as European and Asian banks have scrambled to get rid of derivatives based on US sub prime loans. The market analysts have, by now, started to smile and believe the market to be in a recovering phase. Some don’t agree and say more to come. But what’s the possible future scenarios?
According to Japanese candlestick theories, we have something called three mountain tops. This is a major reversal sign in markets. The signal is formed by the markets three attempts to break through resistance. If we look at the daily chart for the S&P 500 index Futures, we can se such a top. 
The first top was formed on the first of June, the second on the fifteen of June and the third and the last between the thirteen and nineteen of July. To strengthen the last top, a bearish candle should follow. This happened on the seventeen of July when a dark cloud cover was formed. The third top was then followed by a big crass in the market bottoming out on the sixteen of August. The index has been moving up since. But how far will it go and how long will it take.
When the three tops are examined better, we see by looking at the monthly chart, that the price to penetrate is the top of the Internet bubble. This is significant as the this is a major price level to break through. Is it possible that we are seeing a major reversal 
sign forming in the S&P 500. When looking at the Slow Stochastic, we can see signs of an overbought market.
If the S&P 500 can penetrate and make a firm close above this level, we will see the possible continuing of the bull market. But if the next try at the resistance will fail, we will possible see a major pullback of the index.
So how far will it go. It’s not possible to pinpoint exactly how far it can go, but a possible 50% retracement is certainly in the charts. That would mean a retracement to about 1170 in the S&P 500 index Futures contract.
The next few day’s or weeks will be crucial for the S&P 500.
