Houston, We Have A Problem

MACD

SPX (ES) and DJI (YM) have both marginally recorded bearish MACD crosses on the daily chart. NQ is still holding—for now. RTY made its cross on Friday, as discussed in the weekly update.

If NQ joins tomorrow, all three major futures will have recorded daily MACD bearish crosses—at the highest levels ever seen in their entire trading history. When placed alongside the existing bearish MACD crosses on the monthly frames, and with only four trading days left in May, the task of reversing these signals looks increasingly impossible.

The pressure is mounting—and time is running out.

Volatility

VIX closed Friday with a bullish continuation candle, reinforcing upward momentum. VIXY may have formed a Bullish Island—a rare and powerful reversal pattern. Meanwhile, VX and VIX (currently trading) are on track to forming potential bottoms on the 4-hour and 5-hour frames.

If confirmed, this would present a solid bullish setup for volatility heading into tomorrow’s session.

SPX & NQ

I initially expected SPX to be forming wave (ii) between Tuesday and Wednesday, but heavy tweeting from the Administration may have helped accelerate the move into a sharp zigzag. If price breaks below the horizontal support line overnight, it will likely invalidate the potential for an upward impulse.

NQ is in a similar setup and faces the same risk of invalidation if support fails to hold.

CANDLES

Tomorrow, index futures close the 5-day (5D) frame, and the setup is leaning heavily bearish. As it stands, ES, YM, and RTY are on track to print Bearish Engulfing candles, while NQ is lagging slightly—potentially forming a Dark Cloud Cover.

To avoid these bearish patterns, YM would need to rally about 1.2%, and RTY nearly 2%—on top of the ~1% they’ve already gained since Sunday’s open. A tall order, to say the least.

Let’s see how they close tomorrow—it could be a defining moment for the weekly momentum.

Bitcoin

Four days ago, I posted an alert on a potential top for BTC. Since then, it has formed a strong Bearish Engulfing candle—and if current conditions hold, it could complete an even stronger Falling Three Methods pattern tomorrow.

Be prepared.

SUMMARY

The indices—and the broader market—are now facing serious headwinds, with multiple technical signals aligning in a way that would be extremely difficult, if not outright impossible, to reverse in the remaining four trading days of the month. It’s starting to feel like a full-blown “Houston, we have a problem” moment.

Let’s recap: SPX (ES) and DJI (YM) have already recorded bearish MACD crosses on the daily chart. RTY crossed on Friday. NQ is the only one still holding—barely. If it joins this week, all four major futures will have triggered bearish MACD crosses at historically high levels, something we’ve never seen before. This would reinforce the existing bearish monthly MACD signals, which are already weighing heavily on the long-term outlook.

Adding to that, several index futures are on track to print Bearish Engulfing or Dark Cloud Cover patterns on the 5-day frames, further reinforcing short- and mid-term weakness. YM and RTY would need massive rallies—on top of the gains since Sunday night—just to reduce the bearish tone, let alone reverse it.

We also saw volatility (VIX and VX) begin to firm up technically, with bullish continuation candles and signs of forming bottoms on key intraday frames. VIXY possibly printed a Bullish Island—an uncommon, high-conviction reversal pattern.

With the May monthly close now in focus, the market must not only hold key levels but recover quickly to avoid locking in major bearish signals across several time frames. Given the setup and momentum, that task is looking increasingly unrealistic.

In short, unless something dramatic changes in the next few sessions, we may be looking at the early stages of a broader and more sustained correction.

Happy Trading!