So I turned to other charts to gain more clues. The first chart I looked at is TLT. Usually investors flew to Treasury bonds when they tried to avoid risk asset, i.e., the stocks. On the chart TLT formed a technical pattern named "blow-off top". Yesterday it decisively broke to a new high with huge volume, while today it fell back in the same decisive manner and with even higher volume. Usually a blow-off top indicates a key turning point of a trend. It happens when an established trend finally attracted attention of mediocre investors. As they rush in to ride on the trend, the last portion of buying power is exhausted. Smart investors will take the opportunity to offload their positions and the late comers become the unlucky bag holders. They couldn't find anyone else to pay a higher price for their holdings and the price will enter a down trend.
It would be an encouraging signal to stock investors if TLT starts to fall from here. I also took a look at the chart of SPY. On its chart I saw a pattern named "breakout pullback". On May 31st, SPY break out to the upside of a down trend channel. Unfortunately the very next day it fell back into the channel again. This often happens when a down trend has run its course and an up trend is about to establish. Some market participators try to sharply drive down the market to test its determination. In fact a dreadful psychological test happened today when SPY breached its previous low. When a key technical support is breached, weak hands will surrender their positions. A positive sign is that today SPY closed above the support line, meaning it could be only a test. A typical breakout pullback serves to purge out weak hands before the market starts to rally.
If both TLT and SPY point to a bullish outcome, I'd like to disagree with BMI. Nonetheless my most powerful crystal ball is blurry right now, and cautions is highly recommended. But when should an investor be reckless?