The S&P 500 is approaching its September 2012 high of 1475.51 (about 5 points from current levels). This, by the way, is less than 7% from its all-time high of 1576.09 (from October 2007).
In the aftermath of the March 2009 low at 666.79, a series of higher highs and higher lows have emerged, and the ability of the SPX to claw its way above 1475.51 is critical to the preservation and continuation of this dominant post-2009 uptrend.
Notwithstanding the fact that the SPX is “only” a handful of points from doing so, fulfilling that task will confirm that the dominant uptrend is intact and still dominant. It also will trigger a new upside target zone of 1550 to 1570.
A near-term new high will indicate to us that it is ok to buy any meaningful pullback weakness in anticipation of the climb toward the 1550-1570 target zone.
Should the SPX fail to hurdle 1475.51 and instead decline beneath 1451.00, my work will trigger an initial warning signal that a surprisingly strong period of declining prices is developing. This will have as its optimal target a revisit of the November 2012 pivot low at 1343.35.