SPX: Pieces Of The Puzzle Coming Together

Over the past few days I've been saying that I needed more pieces of the puzzle to come together so I can determine if I am looking at a bull or bear as far as the stock market is concerned. Well, it's the end of the week and some of those pieces are beginning to form a picture.. I see a bear not a bull.

Both the NASDAQ Composite and the SPY formed weekly bearish engulfments today. Keep in mind February was a monthly bearish engulfment for the SPYs which I commented on a few days ago.

Usually at the end of a week I'll check for weekly engulfments and I can find on average maybe 5 or 10. This week I found over 250! I've never seen so many before at one time. That sends a message to me that the market will probably move lower not higher. Some of the markets that have weekly bearish engulfments are: EEM, RTH, MDY, XLB, XLE, NIKKEI, EBAY, AMZN, RIMM. SLB, X,YHOO,NUE,SLV....and many more.

Does this mean I am expecting a bear market or a crash? I'm not thinking that at all. I think the market will correct for a few months eventually setting up a buying opportunity, but for now I will be playing from the short side especially if this week's lows are taken out next week.