Two weeks ago we warned that market breadth indicators are at extreme high levels, which usually precedes a change in trend.

Since we are at the beginning of a new month, let's take a look at a monthly chart.

The slope and duration of the monthly DJIA trend are similar to those of all previous rallies from the last 20 years. And it should come as no surprise that the index has stalled at current levels.

For the time being, however, the monthly and weekly trend for the DJIA, SPX, NDX and IWM remain up.

The one area of concern is the daily trend where last Friday a divergence developed between the DJIA and the SPX on one hand, and the Qs and IWM on the other. While the latter two indices continue to trade sideways, above their May 23rd lows,

the DJIA and SPX have broken below these levels, and thus have printed lower lows and lower highs:

As a result, the market finds itself at an important inflexion point. Further, concerted deterioration in all indices will signal that the long awaited correction that many were calling for months, is finally beginning. Therefore, the key for next week will be to monitor how this divergence between the indices resolves itself. No matter what the oucome, however, now that seeds of doubt about QE to infinity have been planted, it will become more and more difficult for the Fed to keep all the plates spinning in the air.