For the last month the focus was on two monthly charts: the SP500 and the QQQ. And the premise was that if the uptrend channel gets broken, a sizeable correction will follow.

That's exactly what happened, and if history is any guide, the indices are in the beginning stage of a sizeable correction.

So far the SP500 has reached and rebounded from its initial downward target, which validates our analysis.

There are many ways an upside target can be projected, but I'll stick to my favorite channel analysis and let the chart speak for itself:

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