The below monthly chart captures the trend lines for the major trends of past few decades. It is observed that at the beginning of the trend, price is above the trend line. But once a trend is established, the price remain below the trend line. There are corrections along the way whenever the price rise up to touch the trend line.
This observation is important at present in S&P. As can be seen, index is trying to cross above the trend line TL4. Is it time for a correction? Or is it different this time? Calls for extreme caution.
If it is different this time and the index continues moving up above the trend line, then in my opinion that would construe a bubble. In that case the question will be - weather to trade the bubble or watch from the sidelines?
Now if it is not different this time then there are couple of options that I can think of (there sure are more. Market is after all not so predictable!!).
1) One option is that the Index completed the correction of previous trend (2008-2018) in March 2020 and has started a new up trend since then. If so going by the previous trends, this new trend will establish a new trend line. Just a hypothetical picture is shown below
2) The other option is that the correction of the previous trend is still incomplete. A hypothetical picture for this is shown below
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