The on the monthly charts has only reached levels in the upper 70's twice before in recent stock market history and those times were 1999/2000 and in 2007. While I'm looking for a healthy pull back from the 1830 area, there's always a chance that a pull back from that area could turn into something more sinister. But who can really say? The $SPX may just blow right through the upper channel line and keep on going. We won't know that until sometime in January 2014.
GL in the week ahead.
As far as the current situation goes, I'm surprised that $SPX has stopped at the upper channel line on the monthly chart, or at least seems to have stopped at the upper channel line for now. If we don't get a snap-back rally Friday or within a reasonable amount of time, then there's a chance $SPX will drop below 1800, round number support, and then down to the mid-line of the channel somewhere around 1750. If we should drop below 1750, then there would be a chance we'll see 1700, in the area of the lower trend line on the monthly chart. IMHO, only a decisive break of that lower trend line has the potential to signal a lasting trend change so maybe that's the answer you're looking for. We're a long ways from $SPX 1700 and as of right now there's no way to know if we'll ever get anywhere near there before the market decides to reverse and head to new highs.
I'm tempted to assume the 1 year trend takes precedence over the 3 and 5 year, if there is a break in trend above the 3 or 5. I'm reluctant to make that assumption and ignore a potential 3 or 5 year break, precipitating a correction toward mid-channel.
Can you tell me how to properly evaluate a potential valid and lasting trend change?
Thanks - Glenn