Market Timing - Slow Approach of a Peak

After a volatile several months in the stock markets following a flare up of the Europe crisis, the markets are again close to hitting a high for the year.  S&P 500 is now at 1403, close to its 1420 peak hit back in end of March.  Since the early June bottom, it has made a series of very volatile up and down jumps to get to today's point.  However, is there a sufficient justification for this?

The catalyst for May's drop was the Europe financial crisis and fears of another recession both in US and in emerging markets, specifically China.  Has that changed at all?  Since May, Spain and Italy are both approaching or have already passed unsustainable yields for their bonds.  Greece is worse than ever.  Political impasse in Europe has not changed.  More data from China shows a slowdown as well as weak data in the US.  In that light, is it justified that the market should be back at its year high?

A technical analysis of the S&P technical chart below shows clearly a slowing momentum in the S&P peaks and even early signs of a reversal in the last 2 days.  While the technical support has not broken down, there are hints that its poised to make a big move soon.  

As for the Nasdaq... (read more)

Looking at the the Nasdaq, we see a similar story though it has not quite recovered back to its March peak.  Nonetheless, the declining upward momentum, combined with the strong resistance puts it significantly at risk.

Advice: Take some profits where you can, especially on positions that have overperformed recently as a reversion to the mean is likely.  While its too early to call a market reversal, there are strong indicators in place for it.