This is a nine year chart of the SPYs. Notice how the high reached nine years ago has provided a ton of upside resistance to the market.
Here is a 6 month chart. Notice how since the early October highs the market has made lower highs and lower lows? Also note the market broke through the 200 day SMA yesterday on strong volume.
Also note what is happening in the markets right now. There is a ton of bad news that is sinking into the overall trading psychology. The housing market is dropping with no end in sight. Financial firms are writing down mortgages -- literally every big firm has had to do so. Oil is spiking and the Christmas shopping season is around the corner. In short, there are a lot of reasons for the market to drop right now.
Food for thought.
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I'm posting on my own blog about this, and it occurred to me that this S&P chart is actually worse than it seems. After 7 years, we just now get back to the previous levels, but really, we haven't because of two considerations:
1) Inflation, in that time reduced the value of the dollar by about 20%, so an inflation adjusted peak, to be at the same level would be around 185. So we're still not back where we started.
2) None of this accounts for the reality that these are all dollar valuated assets and the value of the dollar relative to other currencies has diminished even further.
So if you bought a mutual fund indexed to the S&P in 2000 and held it long, you'd still be losing real dollars. Good times.
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