The NYSE Oscillator indicates the stock market is near or has reached an intermediate-term peak. The two charts below are same period weekly charts of the NYSE Oscillator and SPX. There's generally a positive correlation between the Oscillator and SPX. Normally, when the Oscillator is around 50, SPX is near a short-term top, and when the Oscillator is around negative 50, SPX is near a short-term bottom.

Currently, the Oscillator's 10-week MA (blue line) is about 27, which is the third time over the past five years it has risen above 25 (see orange arrows). Each time the Oscillator's 10-week MA has been above 25, SPX has pulled-back at least 5% within three months (also shown in older charts). Moreover, each time the Oscillator's 10-week MA topped just below 25, SPX pulled-back at least 5% within three months (see gray arrows).

SPX upper resistance is 1,315 (previous multi-year high). Another (lower) resistance level is just over 1,300 (current weekly upper Bollinger Band). Short-term major support is 1,275 (prior high), and intermediate-term major support is 1,246 (also, a prior high). SPX has become less volatile over the cyclical bull market. Consequently, there hasn't been a 10% correction throughout the three-year bull market. 10% corrections take place every 1 1/2 years on average. Therefore, the risk that the next pullback will be greater is high. A 10% fall from 1,300 is 1,170.

Charts available at PeakTrader.com Forum Index Market Overview section.