When I was looking at some long term charts, I found out that the current situation for the SP500 is very similar to the situation in 2008.

Check out the following chart below, and you will see why...

- The RSI hasn't been overbought anymore in a long time, indicating weakness in stock markets... The same was true in 2008.

- The SP500 found heavy resistance in the 1260-1280 zone (just as we warned our subscribers), which was the low of June 2011. A similar thing happened back in May 2008, where price ran into resistance of the November 2007 low.

- Look at the exponential moving averages (20, 50, 100 and 200 EMA's). They have now been converging as price rallied, but right now, price is falling below these EMA's, just like in late May 2008.

- The MACD is now flirting to break the green support line, just like in May 2008, right before financial armageddon occured, and price is right at the green support line now, just like in 2008.

Chart courtesy stockcharts.com

If we are about to see the exact move as in 2008, this is what it would look like...

Chart courtesy stockcharts.com

The Ted Spread, which is the difference between the interest rates on interbank loans and on short-term U.S. government debt or "T-bills", is rising. This indicates that the banks don't trust each other anymore. The same thing happened in 2008.

Chart: Bloomberg

One positive thing however, is that when we look at the big picture, we are nowhere near the 2008 highs (yet)...

Chart: Bloomberg