The S&P 500
has had an impressive run, particularly since 2012. Although yearly returns have decelerated since 2013, The beginning of 2018 saw the most oversold reading on the RSI
since inception. This was followed by a volatile decline that momentarily breached the trend-defining 200 daily SMA
. Any higher high in the vicinity produced by the market in a reasonable time period was bound to produce indicator divergences, which is exactly what followed. Once again, we are seeing higher volatility
. However, this pullback has spent significantly more time below the longer-term moving averages, and range trading can clearly be seen on the Daily chart
. This along with the flattening of the MA's indicates that the bull trend is in the process of ending, yielding first to a ranging market, and then possibly yielding to a new bear market. Economics and global finance will play a role in determining the length of time and the slope of the next market move, but the post-financial crisis bull is writing its final chapter.