Short-Term Top of S & P 500

The first pattern caught my eye is a tight downward channel (green channel lines in the chart above), which shows forceful sell-off meeting almost no resistances. Usually this means that big players are distributing chips and everyone else are trenched. Then there is an ascendant triangle (blue lines), featured with sharp bounce-offs (blue arrows) on the lower boundary. If taken isolated, sharp bounce-off is a positive sign that shows eager buying into the up move. However, it smells fishy as they are right after a forceful sell-off. It wouldn't be difficult, in a short period of just two days, for market makers to forge such a pattern, simply to lure in traders and off-load chips they inherited from the preceding sell-off. There is one more proof supporting my suspect, if we ignore those spikes inside the ascendant triangle, we see a bearish rising wedge (orange lines) embedded in it. The following downside break (red arrow) and sharp sell-off justified its bearishness.

Now the tricky part is to predict where the index goes the coming week. Without risking my reputation, let me just put down some doubts at this moment.

1. The green downward channel distribute chips from big players to market makers, and the bearish rising wedge distribute chips from market makers to the rest of the market. It takes time for the market to digest them. Judging by the timeframe of the two distribution, the next week, and probably more, may not be pleasant.
2. The intraday round bottom on Friday simply shows that the selling pressure is trimming off. One question to ask is where is the eager buying we see the day before? Because traders suddenly change their bullish view overnight? Or, more dangerously, because all potential buyers are sucked in?
3. And the buying power at the round bottom could be pure speculative because of its short timefame. Further more, it makes no more than a 50% retracement.
4. The overhang above Friday's close is now technically at risk, especially if they are hold by retail traders. Every down tick will press them to sell and add more fuel to the selling.

All that said, it's possible that new buying power comes in and kicks off another rally. But it seems that there is no more eager buying from those who fear to miss the train. Knowing that panic will drive the market down, new buyers will be waiting somewhere down below.