Mid term trend has changed

I did this last week but didn't have a chance to post. The big picture hasn't changed, guess it is still worthwhile to post.

In the past month, SPX index broke two critical technical levels 1250 and 1150 decisively. This may have changed the mid term bullish trend that has been forming since March 2009. Given that 1250 is the most critical support level of 2011 and 1150 was the most critical support level of 2010, the penetration of both levels in a downward move try portraits a significant change of sentiment. Moreover, on the weekly chart, the purple line above has worked very well in determining up trend and down trend since 1995. Currently, the weekly close is below the purple line, which may as well signal a reverse of trend. In the past, a penetration from either above or below the line have sustained move afterwards. More importantly, MACD is losing momentum and MACD histogram dipped into negative tertiary, this is painting a bad future for the index.

SPX index has been trading in the channel formed through the top two redlines since 2008, not including the selling climax in early 2009. The current downward move slipped sharply below the channel lower line, and may be targeting the lower line of channel AB with March 2009 low connected. The current rebound is expected to be capped around the green midline of channel AB, which points to area around 1225. A rejection of move above 1225 would make 1040-1060 level as the first target, which points to the lower line of channel AB. A more sustained powerful move would be targeting the lower line of channel AC, which points to area of 1000. This channel is formed through the measured move of the top two red lines.
The yellow half circle at the bottom showed cycles of SPX index. Each 7-8 months, the SPX seemed to form a pivot low. The next pivot low is expected to be reached by end of October.

Within channel AB, SPX index finished a five wave upward move and now is in a correction wave down. Within the wave, a lower order five wave is in the process of forming. The rebound currently is possible the part of wave (4) formation. If that turned out to be the case, a wave (5) move down is expected soon.