NEW YORK ( TheStreet) -- Last week, I cited a confluence of fundamental events and technical chart signals that suggested a near-term top was developing in the S&P 500. In the last two sessions, the SPDR S&P 500 Trust ETF (SPY) has hit lows 3.5% below the all-time peak posted on Aug. 2. After six straight days of losses, this marks the worst bear streak in more than a year. All 10 industry groups in the S&P are moving lower, and the Dow Jones Industrial Average is in the midst of its biggest slump since July 2012, now trading firmly below the 15,000 mark.
The latest run lower has been driven by minutes detailing the Federal Reserve's July Federal Open Market Committee meeting, which open the door for reductions in quantitative easing if the economy improves. That added element of uncertainty has spooked investors and led to another round of risk aversion, which means lower stock prices, renewed selloffs in emerging markets, and a higher U.S. dollar.
The stance expressed in the FOMC minutes indicates the Fed is "broadly comfortable" with plans to start phasing out monthly bond purchases before the end of 2013. The Fed's assessment is that the growth will continue to strengthen throughout the second half of the year, a view supported by the lowest unemployment rate in four years.
Expectations about changes in Fed policy have been in flux since the end of May, when Fed Chairman Ben Bernanke suggested a more refined timeline for when cuts in quantitative easing would begin. Stock volatility since then has contradicted the market slowdowns traditionally expected during the summer.
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