S&P 500 completes pullback rally, original downtrend will begin below 2600

S&P 500 gave a sharp pullback rally in early November from its previous support zone. The pullback rally halted near 61.8% Fibonacci retracement level of the recent downmove started from its all-time high to low of October 10, 2018. S&P 500 has once again reached near its make-or-break level.

The 14-period weekly RSI is quoting at 38.21 and daily RSI is quoting at 35.49, while MACD is also in the negative territory which indicates a downside momentum. S&P 500 is below its long term 200-day EMA. The prices continue to display weakness till below the important moving averages.

The opening downside gap created on November 20, 2018 and the 200-day EMA will act as a major resistance zone in the coming weeks. A close below the recent low of 2603 will open door for a fresh downtrend. It is possible that the lows of earlier this year may be breached and the correction may turn into a bear market.