(See the video above for Frank’s complete chart breakdown.) The S & P 500 has struggled to break decisively above 7,800 since first reaching that area in late July. Along the way, it has repeatedly tested its rising 50-day moving average while developing a negative momentum divergence, with the 14-day RSI making lower highs since peaking in May. Negative divergences alone don’t necessarily lead to immediate declines. However, what’s particularly interesting is how similar technical conditions developed ahead of the market’s two largest corrections over the past year and a half. The first occurred from late 2024 into early 2025. Following an extended advance, the S & P 500 began testing its rising 50-day moving average as negative RSI divergences developed. Subsequent breakout attempts failed, preceding the sharp decline associated with the tariff tantrum. A similar sequence unfolded in late 2025. Momentum deteriorated as the S & P 500 tested its rising 50-day moving average and struggled to break above 7,000. Those failed rallies eventually gave way to a correction of approximately 10%, accompanied by the Iran conflict. Today, we’re seeing a familiar combination: repeated tests of the rising 50-day moving average, difficulty sustaining a breakout above 7,800, and persistent negative momentum divergences. The similarities don’t guarantee another significant decline, but they deserve attention. Importantly, the catalyst matters less than the market’s reaction. Repeated failures of bullish patterns can eventually give way to a successful topping formation, potentially leading to a more meaningful decline. Right now, a potential bearish formation has taken shape, and additional downside follow-through would complete the pattern. That’s concerning, but we’ve seen this before. In fact, the uptrend since the March lows has been characterized by multiple bearish patterns that ultimately failed. Buyers have consistently stepped in just when the technical picture looked its worst. Here are four of them. Frank Cappelleri is the founder and president of CappThesis , an independent research firm that helps active investors through time-tested chart and statistical analysis. Prior to starting CappThesis, he spent 25 years on Wall Street as an equity sales trader, technical analyst, research sales specialist and desk strategist. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
