Possible Double Top

It was a very interesting day today. What started out as another gap up and continuation certainly did not end that way. The buyers were very eager this morning as Geithner was answering questions about the economy to a congressional committee.

In what can only be described as 'panic buying', the indices marched straight up right from the open with very little breathing room. You either had to chase or be left behind. The ES emini futures topped out at around 923 - right at last week's highs and filled the gap from last Monday 5/11.

That's when the sellers stepped in. The selling was intense and accelerated in late afternoon. ES ended the day right at 900, while the Dow Jones retreated all the way from around 8600 to close at 8422. The daily chart of the SPY shows that we are in a very congested area, with a tightening triangle forming, along with a possible double top. The 'glass half full' argument would debate that we may be forming a Cup with handle that will be triggered with a push above today's highs on volume. There is a valid argument to be made for either case, but the fact remains that until this area gets resolved one way or another, it is going to be very choppy. The weekly chart is still overbought and the stochastics have crossed, but the sell signal will only be triggered if we take out last week's lows.

The next few days will be key again for the market. There are support and resistance levels galore, and one of these levels will have to be taken out. Although I am leaning for a correction, I am prepared for either scenario. Ags are looking mighty ripe for a correction, as are energy, solars and coals. Gold and oil look good for a continuation.

Stay alert and good luck with your trading. I'll see you on twitter.