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The S&P 500 completes a base breakdown pattern

by Sentimentrader
2026-03-16
The S&P 500 hit a 3-month low, completing a topping pattern. However, history shows that holding above the 200-day MA signals the end of a pullback, not a bear market.

Key points

  • The S&P 500 hit a 3-month low but averted a 4-month low, effectively completing a topping pattern.
  • Historically, when this occurs while the index remains above its 200-day moving average, it signals the end of a pullback rather than the start of a bear market, boasting a 72% win rate over the next month.
  • Intermediate-term market breadth has weakened significantly, with the percentage of S&P 500 stocks above their 50-day moving average falling below 40%.

A normal pullback or something more?

Last week, the S&P 500 Index continued its decline, hitting a 3-month low but falling short of a 4-month low, effectively completing a topping pattern. Unsurprisingly, this drop triggered the typical wave of negative reactions across social media.

The question is whether this pattern is a sign of a more profound structural breakdown or just a standard pullback within an ongoing uptrend. As always, we will take an objective, data-driven approach to analyze potential forward returns following the appearance of similar technical patterns.

Similar drops within an uptrend lead to positive returns

When the S&P 500 closes at a 3-month low (but not a

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