The S&P 500 is showing early technical warning signs that point to more downside ahead, which is bad news for stock investors hoping the rally continues.

• A longer-term momentum gauge (RSI) on the S&P 500 just hit a zone it has only reached once before, back in 2021, often a sign a rally is running out of steam.
• A bearish divergence could be confirming — meaning price keeps rising but the underlying momentum is actually weakening, a classic warning sign.
• The index has not pulled back to touch its own short-term moving average lately, which usually happens before any period of sideways or down action; when that reconnect doesn't happen, stocks tend to drift sideways until it does.
• A close in December below roughly 7,350 on the S&P 500, or a drop back under this quarter's low early next year, would confirm the market has put in a local top.

Outlook: More downside is favored overall, with December's close relative to about 7,350 seen as the key level to watch.