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I just did some more looking at the chart for S&P 500 Index. The SPY follows the same pattern, except of course, the numbers change.

This is using the default log scaling on weekly and daily charts (depending on the overall timeframe).

There seems to have been a long term trendline in place since late 1994. It was started at that time and tested July 1996, and October 1998. That line was tested again in October 2000, then broken in November 2000. That trendline represented a rise from 450 to 1550 at the height in March 2000. The 1500 area was retested in September 2000.

Since breaking through the long-term trendline, the 150-day EMA was tested from below on 11/6/2000 and 1/31/2001. It's fallen from a high of 1376 on 1/31 to low of 1215 last week (intraday levels).

The current levels were a consolidation area at the beginning of 1999. It seemed to have rested there for about 2 months before resuming it's climb and after a decline back to the long-term trendline at the end of 1998 (which also formed a W on the weekly chart).

So, what does this mean?

Well, on a monthly log chart, the 30 period line has flattened out. Combined with the breaking down through the long-term trendline, I think that means that the trend has changed. I guess what remains to be seen is whether this will be a short-term consolidation (like 1994), a long-term consolidation (like the 70's), or just the start of further breakdown. I guess we have to watch what it does at the 150-day EMA and what it does at the horizontal support in the 1200, 1100, and 975 areas.

All criticism and comments are more than appreciated. Thanks.
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