The technicals and charts were pretty clear a few weeks back that the stock market was about to top and rollover. As expected, that has occurred. While I expect more of a bounce to play out somewhwere between Monday and Wednesday, by week’s end the decline is likely to resume.

This recap of the week just concluded provides us some clues as to what lies ahead. “for the week, the S&P (SP500) slipped -1.0%, while the tech-heavy Nasdaq Composite (COMP:IND) slumped -3.5%. The blue-chip Dow (DJI) bucked the trend, rising +1.0%”.

If the market was going to be making new highs in the relatively near future, some of those numbers would probably have been reversed. The NASDAQ, and particularly the NASDAQ 100, lead. By being the worst group by far, they are telling you more downside is likely. This is especially true when the DJIA was actually higher, thanks to the big lift on Friday.

The DJ is the “fakeout” index. When it rises while the S&P and NASDAQ are down, it usually masks the market’s underlying weakness. When the opposite is true and the other two go higher but the DJ is lower, that is often a signal that stock prices will be higher at least until that divergence ends.