Another Massive Trading Range?

The current S&P 1-year chart doesn't look terrific, and the ugly July decline appears to have come out of almost nowhere to test the March lows.


Backing up chronologically gives us a little more perspective, though. Look at how significant the 1500 level is: the selling kicked off as soon as we crossed it.


Clearly we're at a major pivot point. Holding above 1500 would be very bullish. Failing and dropping down again would be equally bearish.

A final chart to provide some historical background:

This is the Dow Jones Industrials in the great bear market of the 1970s (then the most watched index). The Dow had an extremely rough relationship with 1000. It first tested it before this chart begins in the late 60s, then retested it several times before eventually breaking it decisively in 1982.

(Dow Jones)

If the current rally breaks down, does it suggest that we may have just made the second peak of a massive long-term trading range?