Much of the rally in September and October may be the result of end-of-fiscal-year window dressing. It seems, many financial institutions were caught-off guard by the sustained rally and bought the slightest pullbacks. Consequently, with the fiscal year over, selling may accelerate.

The first chart below is an SPX daily chart. I suspect, the rally above 1,350 was almost entirely driven by panic buying, including short-covering, since the pullbacks became shallow. Also, above 1,350, short-term technical indicators were consistently severely overbought.

SPX has pulled-back to a minor congestion area in the low-1,360s, which is support. There are also support levels in the low-1,350s, around-1,340, and 1,326. I suspect, SPX will not rise much above 1,370 short-term, and a larger pullback may take place before the end of November.

The second chart is a Nasdaq daily chart. A double-top was created recently. The indicators suggest an intermediate-term downtrend has begun. First major support is around 2,300 and then 2,250. However, both SPX and Nasdaq may consolidate somewhat before moving lower.

The current cyclical bull market is the second longest in history without over a 9% correction. If SPX corrects 9% from the 1,390 high, it'll fall to 1,265, which is still above the summer lows. The possibility of a correction over the current intermediate-term downtrend should be taken into account.