The S&P 500 looks set to do a correction and bring much needed value back to the market.

Technically speaking, there is no imminent stock market crash signal but instead what looks like a pullback to $272 on SPY.

Weekly chart on SPY gives high probability of a pullback next week.

Notice the negative divergence between the Twiggs Money Flow and the price of SPY. This bearish divergence suggests that a market correction is coming.

Technically speaking we don’t see a stock market crash coming yet, but fundamentally is an entirely different thing.

Fundamentally speaking, a stock market crash could be coming with the escalating trade war with China. China could restrict our access to rare earth metals or take some other retaliatory action in response to the President enacting 10% tariffs on the remaining $300 billion in Chinese goods.

Lots of money moved into 10 year bonds last week in a flight to safety. This caused the spread between 10 year and 3 month treasuries to recover above zero. This is a bearish sign as a recession normally follows the recovery and not the initial inversion.

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