The S&P 500 is sending early warnings that a broader market downturn may be unfolding after the index slipped below its 50-day moving average (MA) and closed beneath that level on Monday, reinforcing weakening short-term momentum.
Notably, the index has extended its losses, trading at 6,630.21 as of press time, a drop of 0.6% in the past day.
Now, technical signals on the daily and weekly timeframes suggest the ongoing pullback could evolve into something more significant if current conditions persist, according to insights by TradingShot posted on TradingView on November 18.
According to the analysis, a key concern is the persistent bearish divergence forming on the weekly RSI. Even as the index has been printing higher highs, the RSI has been trending lower since late October, mirroring the setup seen in mid-November 2021.
At that time, the divergence preceded one final rally before the bull cycle peaked, eventually giving way to the 2022 inflation-driven bear market. The current outlook shows a similar structure, with lower RSI highs contradicting price strength and hinting at fading underlying momentum.
Another crucial level highlighted in the analysis is the 100-day moving average, which has served as the market’s primary support throughout the past five months and during major up-legs of the broader bull cycle.
S&P 500 key price levels to watch
A weekly close below this trend line would represent a structural breakdown, historically the point at which bullish cycles have transitioned into bearish phases.
If that breakdown is confirmed, technical projections suggest the S&P 500 could retrace toward the 200-week moving average, the long-term support zone that marked the bottom of the 2022 bear cycle after a decline of roughly 27.6%.
Based on current price levels, the next major accumulation zone is estimated around 5,300 to 5,000, assuming the recent peak holds. Should the index form a new high before rolling over, the downside levels would adjust accordingly to reflect a similar proportional correction.
The technical outlook comes as bearish sentiment spreads into the crypto market as well. Despite the warning signs, a section of Wall Street remains bullish, with some analysts projecting the benchmark index could still reach 7,000 next year.
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