S&P 500: Correction Or Top?

 | Mar 15, 2014 11:48PM ET

Picking tops is a fool's game, but US stock indices are showing signs of an interim top, trading in the red three out of the five days this past week and posting their first weekly loss in six weeks. My suggestion has and will remain to book profits on big winners and potentially hedge larger positions with a short futures or purchase of put options. Remember, insurance gets a lot more expensive once the house is on fire.

The darker blue line is your 20 day MA and on a settlement under that level Friday at 1883 I think lower trade is likely. I see the next support level come in at the 50 day MA (light blue line) and the 38.2% Fibonacci level which both come in at 1823 in March futures. Continue to use the Fibonacci levels for guidance for entry and exit as you can see on the daily chart below. If circumstances continue to heat up with Russia and the Ukraine, or we get a curve ball next week from the Federal Reserve do not rule out lower trade. Futures could trade back to 1776 which would represent a correction of 5.9% from record highs and still we would see no chart damage.
h3 Daily:/h3