The S&P could crash if it falls below this level

The New York stock exchange. Michael Nagle / Bloomberg

The stock market is having a bad day and a bad week. But don’t blame the disappointment on Big Tech’s earnings: stocks are down because investors are watching a double top of the market.

A double top is bad news. It is a trend in stock charts that forms after a stock or index hits two highs close to each other with a drop in between. It looks like a capital letter M.

In this case, the S&P 500 reached 3581 in September, fell to 3237 later that month, and rebounded to 3534 in early October.

The market is back at 3270 after falling 1.2% on Friday. Technical theory would say that if the market breaks 3237, down another 1%, look below.

“The term double top has increased [in search] according to Google Trends, ”said Instinet strategist Frank Cappelleri in an email to clients on Friday. But he remains hopeful, writing “Believe what you want, but the last few times the double top was so popular in the past five years, the market hasn’t collapsed.”

In particular, Cappelleri noted that there were also dual fears ahead of the 2016 election. “The [S&P] took a break from her fort February. [to] Race in September, only to increase after the election, ”he wrote. “There is no point in trying to assess how things will react after the election.”

He recommends looking at things other than big tech to get a more accurate picture of market sentiment. The market is, of course, beholden to big tech, which makes up a large chunk of the S&P 500’s market capitalization.

And Apple (ticker: AAPL), Amazon.com (AMZN), Alphabet (GOOGL) and Facebook (FB) have just reported numbers. All are down, except Google. Profits could not keep up with the heightened expectations of investors.

Big Tech’s post-earnings declines explain why the Nasdaq Composite is down 2.5%, far more than the S&P or the Dow Jones Industrial Average.

But the Invesco S&P 500 Equal Weight (RSP) ETF only fell 0.3%. Other stocks hold up much better than Big Tech. This is good news for the weekend to consider.

Write to Al Root at allen.root@dowjones.com

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