If you’re bearish you’re probably looking at this nasty rising wedge that looks like it has completed to the downside. Also, there’s a 2B top in place which gives you a low risk, high reward trade set up. The trade (according to Trader Vic) would look something like this – go short or buy puts and place a stop at the old highs. Prices will either break down hard or you will get stopped out after a small loss.
Right now, I give a 60/40 chance of the bearish chart working out. While the charts indicate downside, I think sentiment is more negative than most believe given the high QQQQ put/call ratios. The market has had a lot of negative stuff thrown at it (high oil, increasing rates, medicore earnings) but it hasn’t broken…I view that as a positive.