S&P 500 close = 1091.06

Signal = BL/N

Apple failed to lift the markets higher and the 1100 resistance level was not taken out today. That was absolutely necessary for the upside momentum to continue. Since that did not happen, a retreat is now imminent.

Considering the markets have had a huge run up since October 5, it is now time for the markets to pull back. I have a feeling that the markets will try to make a last effort to push higher tomorrow morning and then fall back towards later in the afternoon or by Thursday. The daily chart is now overbought, and the short-term trend almost reversed back to down today. This is the opposite scenario of what I talked about on October 4. In other words, we have a formation that could result in a decent pullback in the markets very soon.

The key support level to break for the short-term trend to reverse is 1086. I think if that level gets taken out early tomorrow, then a quick move down is almost certain. That level of support obviously could change if it not taken out early tomorrow morning. Stay tuned for my intraday tweets.

Key levels to watch for tomorrow:

1100 - recent high

1086 - key support for short-term trend reversal for the S&P 500; similar levels for the other indices are: Nasdaq = 2151, Dow = 9992, Russell 2000 = 614 (short-term trend has already reversed)

1075 - gap level support and first profit target area for shorts if 1086 is broken