The past two sessions in the cash SPX appears to be a mirror image of the early July bottom period. That is to say that action on Monday and Tuesday left behind "distribution candles," which in English means that the vast majority of the intraday buying occurred well above both the opening and closing prices.

Looking at the pattern from early July that exhibits a couple of candles that have the exact opposite look of the last two days -- namely, "accumulation candles," where the vast majority of the intraday buying occurred below the close (a potential bullish signal). I don't know what to label the last two sessions: Two Dojis? Inverted Hammers? Whatever the name, the implication technically is that a near-term peak might be emerging in the S&P 500 and its SPDRs (SPY). Only a powerful up-day, with a strong close high on the candle will invalidate the last two sessions.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.