US Stock Markets Outlook as at August 21, 2015

The top US indices dropped between 2.0-2.9% yesterday. In term of points lost, DJIA lost 358 points while S&P500 & Nasdaq lost 44 & 142 points respectively. We can see from the charts below that DJIA & S&P500 are now below their long-term uptrend line while Nasdaq is resting on its uptrend line. 

In my opinion, DJIA is leading the decline in US markets because the top 30 stocks consist of many global companies that are being negatively impacted by the strengthening of the US Dollar. Even without this unfavorable movement in the USD, the US markets are over-extended and due for a serious correction. Looking at the charts, I believe it will be more than just correction that we should worry; this could be the market top!
 

 Chart 1: DJIA's weekly chart as at Aug 20, 2015 (Source: Stockcharts)

 
 Chart 2: S&P500's weekly chart as at Aug 20, 2015 (Source: Stockcharts)


 Chart 3: Nasdaq's weekly chart as at Aug 20, 2015 (Source: Stockcharts)