The markets sold off today, probably for a few reasons. First, Bernanke said there is a possibility of a recession. Crude oil spiked. I also think there was a simple round of profit taking after yesterday's run. There was also the realization that the credit crunch is far from over despite Lehman's ability to raise new capital. There was also the news that Bear Stearns was close to Chapter 11 which isn't good to hear given the current credit market environment. Finally, we get employment on Friday and I think traders are concerned about that number.
The SPYs formed a double top by mid-morning (which is circled). After that they sold off. There were two bear market pennant patterns where traders tried to rally the market to no avail. Also notice that prices sold-off to the 38.2% Fibonacci retracement level from yesterday's run.
Depending on who you ask, the QQQQs formed a double top or a triangle top. I think it's a triangle top, but that's a judgment call. Like the SPYs, the QQQQs sold off, but this time to the 50% retracement level. Also note the sell off went to the 50% retracement level.
With the IWMs we get a double top and a move to the 38.2% retracement level.