CNBC's Pisani: Markets Showing Buyer Exhaustion

What's up with the markets? The S&P 500 has moved sideways for 8 trading sessions. Several times it has tried--and failed--to move past 1415. Sideways trading would not be unusual in a normal market, but this is not a normal market--we are in the midst of one of the most impressive and sustained rallies since the bottom of the market in 2002, a 5-month rally that has seen the S&P move up about 15% since the recent bottom in July.

During that time, it has been almost straight up--the five or six notable down days were followed by an immediate resumption of the uptrend. Sideways--even for 8 days--has not been seen until now.

What gives? The market is showing signs of exhaustion: volume has dropped off in the last two weeks, and every attempt to move to new highs has failed. But it has failed because buyers lacked sufficient volume to move the markets ahead; it failed, in other words, because of buyer exhaustion. It did not fail because sellers came in and attempted to take profits in any dramatic way. It's a subtle but crucial difference.

This doesn't mean that the markets could not resume a move forward again; indeed we are so close to new highs that it could even drift to new highs without bullish news.  But the sideways pause is a warning that the rally is getting old.