S&P 500 breaking down...

The S&P 500 is currently breaking down out of its short term triangle pattern. Watch for a continued move down to at least 1275. If that breaks watch for a move lower to around 1220 which was the highs last year before the Flash Crash.

Market internals have been weakening over the past few weeks to months. This could indicate a larger pullback in the making and buying the dip should be taken with caution.

Also, Spain's downgrade this morning has people remembering that Europe isn't exactly out of their mess yet. In my opinion I think their sovereign debt crisis is just beginning. Check out these articles if you want some further information.

• Europe Debt Crisis May Boil to the Surface this Week (CNBC)
• Caught in the Euro Trap: Internal Opposition Grows to Further Bailout Measures (SPON)
• European Debt Crisis Intensifies (The Globe and Mail)
• Moody's Downgrades Spain to Aa2, Outlook Negative (Zerohedge)

S&P 500 Index Daily Chart