$DAX - Chart Link

$FTSE - Chart Link

$CAC - Chart Link

The FTSE and CAC have now given back all their gains for the year (2014).  Further, all the major European bourses are currently in downtrends.  The steep corrections that the SPX experienced in 2010 and 2011 were in part related to Europe.  Most European markets have remained relatively stable (rising) over the past three years but some of these indexes peaked in early June and this week several European markets sold off sharply on European banking fears (Portugal's largest bank having problems).  

Following the 2011 correction, the US markets have been stair stepping higher over the past 3 years without a break in symmetry.  However, even the bullish mapping of this advance is approaching a culmination for Primary III with a downtrend (perhaps has started) and uptrend needed to complete.  Maybe the catalyst for a larger correction (similar to 2011) will again center around issues out of Europe.  Needless to say, longer term bearish views would imply even more downside over time.  I suggest simply keeping an open mind and trading/reacting to what the bigger charts portray over time.  In summary, one must always have an exit strategy in place commensurate with one's objectives and risk tolerance. We will continue to point out patterns but you must trade in accordance with your plan. 

For the short term, the SPX has begun a choppy pullback thus far after making a divergent high on the daily and weekly charts at 1986.  While the SPX has yet to signal an intermediate downtrend, the divergence and weakness in Europe keeps us on alert for the possibility of more downside probing this month.  Should further selling take hold short term, let's monitor the 1929 and 1901 pivot RANGES as potential targets this month. Again and most importantly, we should always respect the message of the market and adjust accordingly.