Some people have already begun to call it the 'Alibaba Top' and there really is a feel of "this time is different" - since the minor correction of November 2012 every single dip has been bought and the bull market has continued to produce higher highs. Mark Hulbert is out with a must read piece entitled "Did Alibaba’s IPO signal a top in the stock market?" - an important excerpt:

"Martin says market tops are accompanied by excessive levels of bullishness, and he argues that now certainly qualifies. One indicator he mentioned in this regard is the very low share of investment advisers polled by Investors Intelligence who are bearish. This percentage fell to 13.3% in early September, the lowest in nearly 30 years. Martin also draws attention to the flow of mutual fund assets into the bullish and bearish index funds managed by Rydex, which show an extremely high level of bullishness that is exceeded in Rydex’s data series only by what was seen at the March 2000 market top."

While the sentiment and valuation backdrop make a compelling bearish case, from where we stand today the technical picture is even more intriguing. Friday's bearish reversal followed by Monday's trend down day has set the S&P 500 up for a rare reversal pattern, which offers a very bearish recipe when occurring after a new high (Friday):

Click to enlarge

SPY_Daily_9.23.2014

While this is not a textbook 'three black crows' pattern due to the body of today's candlestick, it is close enough and unique enough to raise alarm bells. The three black crows pattern leads to a bearish reversal 78% of the time according to Bulkowski, The last time the S&P made a new high followed by 3 solid red candlesticks was in September 2013 which resulted in a 5% pullback, before then the last time such a pattern occurred was May 2011 which eventually resulted in a 20% correction within 3 1/2 months. Today's close now takes on huge importance.....