S&P 500 – Is Consolidation Round the Corner?

I read this commentary from DNA Decoder:

Something to watch in the coming weeks

History does not repeat itself, but it does rhyme – Mark Twain

If 2013 offers us enough similarities to 2012, a consolidation period might not be too far away. Only time will tell. The image below shows the S&P 500, SMA20, SMA10, RSI(14) and the Aroon.

(click to enlarge)

Image created at stockcharts.com

Some bearish observations about the chart:

1. The SMA10 crossed the SMA20 in the most recent market drop into the sub 1500 zone. This didn’t happen in the late December drop.
2. Volume decreased while the market went up during last week.
3. Up to this point, the RSI seems to be forming a bearish divergence that started in late January.
4. It’s possible that we may be riding the 5th impulsive wave of an Elliott wave set that started on November 2012.

It will be interesting to keep watching the market and see how the next weeks unfold.