S&P 500 showing weakness after a long periodS&P 500SPCFD:SPXTopChartPatternsS&P 500 showing weakness after a long period Look at the chart before you read anything. The candles are the SPX . The blue line is EEM , the emerging markets index. The S&P made a top earlier this summer, and in August it made a higher one. Emerging markets did the opposite. Their best moment came in the spring, and the top it made this month is clearly lower. For the first time since early 2025, the two are walking in different directions. I said the opposite in January In January I wrote that the picture looked healthy. Both indices were making new highs together, and I told my readers to keep holding. SPX did a 15% since my post. That was the honest reading then. Now, a divergence appeared. Why that blue line matters Emerging markets are the most nervous money. When big investors start to worry, this is what they sell first. It is easy to sell and it is hard to defend in a meeting. So the S&P can keep climbing on a handful of large names while the risky money is already walking out of the building. The index still looks strong. The crowd behind it is thinner than it was. "So should I sell everything?" No. And this is where most people get it wrong. A smoke alarm is not a fire. Sometimes it is only the toast. But nobody stays on the sofa when it beeps. You stand up and you go and look at the kitchen. That is what this is. It is not a sell signal by itself. It is a reason to go and look. Going to look means three simple things. Do not put new money in with both hands. Know the exact level where you would step aside on the positions you already own. Accept that reducing your exposure a little is not a defeat, it is the price of sleeping well. How small the sample is I have found six of these in the last 15 years: 2011, 2014, 2018, 2020, 2021 and 2024. Every one of them was followed by a fall of between 15% and 35% in the S&P 500 in a few weeks. Six is not a study. It is a small number and I am not going to dress it up as something bigger. I show all six charts, one by one, in the article published in January and you can see 3 examples in the current chart. In fact, there is room to be optimistic when you look the big picture, the market is 80% overheated, but there is still some room to go up. In short... The S&P is printing higher tops while emerging markets print lower ones, and that has not happened since early 2025. A warning is not an order to sell, so today the job is to check your levels, not to empty your account. Six past cases is a small sample, and I would rather tell you that than sell you certainty. Just be careful. I will keep watching that blue line every week. If emerging markets climb back above their spring high, the alarm was only the toast, and I will say so here.