Is risk on the brink of a drop?

Leave the fundamentals, QE3 (which was a total failure), elections and all other distractions aside and concentrate on the technicals, they usually don't lie. What do you see? Technical weakness all around the block. The markets are starving for correction, all these short-term european and US election rallies have exhausted the markets totally, nobody is willing to take any more risk at these high levels.

Let's look at the GOLD futures' daily chart first.
I can instantly mark several bearish signs and not even one bullish.
- The first and most important is the Head and Shoulders pattern that usually marks a top after a strong bull move and is considered a strong reversal signal. Look how beautifully it played - the price broke the neckline first, then came back to retest it for resistance, rejected it and finally plunged down to 1754 where it close the friday session.
- 1790 has been proven as a strong resistance this year many times and it holded this time too despite the massive easing from most central banks, which leads to the conclusion that the GOLD futures market is not as strong as most people think.
- Bearish RSI divergence with price closing friday's session below 50 which is another bearish confirmation.
- Twiggs money flow divergence with price action and actively decreasing since 22nd of august, meaning that the GOLD futures market is a massive speculative bubble pumped on speculative bets and not real money inflow.
- Stochastic oscillator gave a strong sell signal with MA's crossover below 80.
- Golden cross - the Golden cross pattern (crossing of the 50day and 200day SMA) is one of the most bullish patterns observed by traders and usually comes with a correction right after it which we didn't see yet but should occur anytime soon.

It gets even more interesting when we look at E-mini S&P500 futures (symbol: ES_F December 12 contract). What do we see here? Not much different than GOLD - fully matured bull trend, divergences, exhaustion, weakness.

- The first and most important bearish sign I would like to bring to your attention is the break of the ascending channel's and price action's support around 1430, then price returned to test for resistance and rejected beautifully to finish on a daily and weekly low at 1421.00.
- Bearish RSI divergence with price closed below 50 barrier of the oscillator.
- Stochastics bearish crossover in the lower area of the oscillator.
- Twiggs money flow big decrease and close below 0.

With all technicals pointing to a drop/correction in the said markets I am strongly bearish and I am looking to short them. Friday was a great opportunity to do it but unfortunately I missed it because I wasn't on my desk and besides that I am forbidden to open positions at friday. However, there are infinite opportunities out there and I am looking to jump on the next one and ride it with the wind.

I wish you a profitable trading in the week ahead and stay out of trouble, folks. Ciao.