Over the last six weeks, stock markets have been showing signs of topping out. Recent trading suggests that an overdue correction may be getting underway. There are a number of seasonal, technical and fundamental factors converging that suggest indices appear vulnerable at the moment. Seasonally we are still in the historically weakest time of the year which usually runs from mid-August through mid-October. When earnings season, the NASDAQ stalled, but more recently has started to break down. Technical indicators have been flashing warning signals for a while. In July a head and shoulders top appeared in the RSI for the NASDAQ 100 which then combined with a negative divergence at the August high to signal that upward momentum was fading. Since then, the RSI indicator has tracked a clear downward shift in momentum. Fundamentally, there has been a growing disconnect between the USD soaring on speculation that the stronger US economy will drive the Fed to become more hawkish and start raising interest rates sooner on one hand, and on the other hand, stock markets acting like the liquidity party isn’t going to end for a long time. The recent retreat in US indices indicates that reality is starting to catch up with stocks. A major breakdown is now underway in the NASDAQ 100 which indicates that even momentum stocks have run out of gas and are starting to fall back to Earth. Falling below 4,000 broke a round number, former breakout point, trend support and the 50-day average, all indicating that a major downward trend change has taken place. The start of a new downleg was confirmed by the retest of 4,000 as new resistance earlier today and RSI falling well below 50 to indicate downward momentum is accelerating. The index is currently testing 3,945 a 23% retracement of its April to August rally. Further Fibonacci levels that could potentially be tested include 3,845 where the 38% retracement and August lows converge then 3,765 where the 50% retracement and 200-day moving average cluster. Apple, the premiere growth and momentum stock of the century so far is also showing signs of fatigue. The shares have had a huge rally so far in 2014 but levelled off just as the company announced and launched its new iPhone6 smartphones. For the stock, talk of bending phones and operating system problems have been dismissed as usual hiccups. Rather, the sideways action between $96.00 and $104.00 over the last month suggests that a strong launch was already priced in and some traders have started to take profits against the news. The RSI showing an overbought signal several times since May showed the rally was getting overextended but the trend of lower highs over the last month and the recent breakdown through 50 appear more troubling suggesting upward momentum is gone and the pendulum is starting to turn downward. The shares have slipped below $100.00 and their 50-day average once again but so far continue to hold above $96.00 channel support. Should that fail, the 38% retracement level near $91.00 could be tested, or even $87.00 where a 50% retracement and the 200-day average converge.