The above weekly chart of the S&P500 index shows that we are facing a strong resistance at around 1100 which corresponds to the test of the downward trendline from the October 2007 highs.
Now let's zoom on the daily chart of the S&P500 index.
We can see that:
- we are still making higher highs and higher lows, which is the definition of a bull market.
- the pullback from the highs is each time getting bigger: -3.5%, -4.5%, -5%, -6.5%,...
- each green arrow on the chart shows a bear trap where the market started to rebound
- the RSI (Relative Strength Indicator) is showing a bearish divergence.
However, before calling it a bear market, I would wait for the S&P500 to go below the dotted line and for the 50 day moving average to start trending down.
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