The S&P 500 is near a make-or-break moment that will decide the bull market's fate

• The S&P 500 is sandwiched between two key technical levels, and the next phase of the bull market can't continue until a breakout occurs.
• Bank of America's Stephen Suttmeier outlined the key technical levels to watch on the S&P 500.
• Year-end seasonality is about to turn bullish for the stock market, he said.

The S&P 500 is approaching a make-or-break moment that will determine whether or not the next phase of the bull market gets underway.

The index is sandwiched between two key technical levels: its rising 200-day moving average, which is acting as a form of support, and its declining 50-day moving average, which is acting as resistance.

According to Bank of America technical analyst Stephen Suttmeier, an "upside follow-through" in the market is a much needed next step for the bulls to advance this year-long market rally further.

"After defending the low 4200s as big US equity market support, the S&P 500 has rallied, but resistance from 4,375 to 4,407 has provided a stubborn tactical barrier for the bulls," Suttmeier said in a Wednesday note.

On the flip side, Suttmeier is monitoring the 4,300-to-4,335 range as a key area of tactical support for the market.

The S&P 500 hit its resistance range with a high of 4,383 on Monday, as well as another high of 4,393 on Tuesday, before it immediately backed off and continued lower. The index currently trades at 4,333.

Suttmeier highlighted that an encouraging sign over the past few days has been an improvement in breadth, with 80% of NYSE stocks registering an up day on Monday and 70% on Tuesday.

Market breadth refers to the underlying participation of securities in a stock market rally. In other words, is a stock market rally being driven by only a handful of the largest companies, or is the majority of S&P 500 companies also moving higher amid a broader market rally?

It's an important measure technical analysts monitor to better understand how strong any given rally is underneath the hood. With much of this year's rally having been driven by a handful of mega-cap stocks, it's an encouraging sign for bulls to see a relative improvement in breadth recently.

Another encouraging sign for the bulls is that year-end seasonality has been historically positive for stock prices, especially during the month of December.

Since 1928, the S&P 500 has delivered positive returns 74% of the time in December, with an average monthly return of 1.3%. The returns are even more bullish in December during the third year of the presidential cycle.

"Monthly S&P 500 seasonality suggests buying weakness into September and October prior to a fourth-quarter and year-end rally," Suttmeier said.

But this bullish setup can unravel if the S&P 500 trends lower and decisively breaks below its short-term support level at 4,300 and its longer-term support level at 4,200.