The S&P 500 has been one of the most resilient assets of the year, climbing steadily despite geopolitical tensions, high rates and mixed earnings.
Key Takeaways:
Weekly RSI divergence suggests the S&P 500 is losing momentum.
A weekly close below the 100-day MA could trigger a deeper correction toward 5,300–5,000.
Some analysts still believe the index could reach 7,000 next year despite technical risks.
That trend is now showing early signs of strain. A combination of weakening momentum signals and fading technical strength is prompting some traders to question whether the market may be closer to a turning point than previously thought.
Instead of focusing on day-to-day price moves, analysts are highlighting patterns in the longer-term charts that suggest buyers are no longer in full control.
RSI Divergence Raises Red Flags
Since late October, the index has continued to push into new highs while the weekly RSI has been slipping lower. The pattern is known as a bearish divergence, and it often signals exhaustion beneath the surface even when price action still looks healthy.
A similar divergence appeared shortly before the last major cycle topped out in late 2021. One more rally followed, but the uptrend reversed sharply afterward and eventually turned into the 2022 bear market. The current structure, according to multiple chart watchers, is nearly identical.
Defining Support Now Becomes Critical
Momentum warnings are one side of the story. The other is price structure. For most of the past five months, the S&P 500 has relied on mid-range support from the 100-day moving average to maintain the broader bullish sequence. Every major impulse since early summer has bounced from that level.
If the index loses that support on a weekly closing basis, technicians would consider it a confirmed trend shift rather than a temporary pullback. The next major long-term support sits near the 200-week moving average — the same area that marked the bottom of the 2022 decline.
Based on current pricing, that support region aligns with roughly 5,300 to 5,000, assuming the recent high remains the cycle peak.
The Market Is Split Between Fear and Optimism
Despite the growing cluster of warning signs, not everyone shares the bearish outlook. Some strategists argue that solid earnings, falling inflation and stable employment could carry the index higher next year. Their most optimistic forecasts place the S&P 500 near 7,000 in 2025, suggesting the bull cycle may not be finished.
For now, the index trades around 6,630, down 0.6 percent in the past day — a modest drop by itself, but one that comes at a sensitive moment technically. Whether buyers defend major support will determine the next phase of the market.
