Stocks Finally Break Down

Stocks have finally broken out of the range they have been holding since the end of May. The S&P 500 has remained confined between 4068, the neckline of our failed inverse head and shoulders pattern, and 4214. The neckline of the inverse H&S is a strong technical level and the fact that we have broken down past it is not a good sign for stocks. We found support below after crossing the vacuum zone to 4009. This is the last technical level of the 4K's. After that, we have 3978. The Kovach OBV has turned bearish, but it is likely that we will range for now, establishing value at current levels. If we are able to rally, 4068 should provide strong resistance, and should be considered a price target for tnose looking to trade the range.