First off, our upside resistance level mentioned months ago (1474) became the ultimate swing high of the rally, to the point!
Now what's next? Well the biggest drop we seen since the reversal in June measured 54.19 points, that equates to support at 1420.32 SP from last highs. 1422.38 (area we bounced from today) is April's bull market high. Also I've marked the swing highs and lows on the chart since we've been inside this current bull flag formation off the 1474 highs. It's been 2 down moves of 43 and 45 points with 2 up moves of 40 and 38.50 pts. That equates to 1420-1418 as support respectively.
So we've got confluence below us, I don't really like Friday's high volume high range bar hanging above. But unless we can see a reaction against the prevailing trend that is greater than any of the previous reactions I'll assume the trend will continue for a little longer.
That being said, this short term bull is getting old. I'm going to use the size of the last breakout rally (77.95 pts) as my measuring stick. Take that from today's low and we get 1500 SP on the dot, matching the trend line resistance above. I think that's as good as place as any for a swing high.
It's possible we then see a type of inverted head and shoulders pattern (see 2011) before breaking down, we should see bearish divergences emerge as well on the internals. We should then be looking for at least a drop of 155pts that matches the drop from the April highs to the June lows of this year, and most likely test that trend line below.
I am still long term bullish and I believe once the coming reaction finds support we should see a rally to follow that takes the S+P back up to it's all time high in the 1550-1576 area.