20 year S&P 500 trendline actually broken months ago

[caption id="attachment_558" align="aligncenter" width="500" caption="S&P 500 since 1980"][S&P 500 since 1980][][/caption]

I looked at the 20 year S&P 500 monthly chart last week and noted that we're at an interesting junction in the market. Now that it's the end of the month, I can say that we have successfully held that level after all. The graph above is from MSN finance. It took me a while to find a legible chart going back before the 87 crash.

Actually, what I have illustrated istechnically wrong. I should use a logarithmic scale instead because of the compounding effect of growth in the economy. If we look at the chart on a logarithmic scale, we see that we have just broken it in this year's market free fall (around June). I guess that's another reason to the verocity of this move.

[caption id="attachment_560" align="aligncenter" width="499" caption="20 year S&P 500 chart on log scale"][20 year S&P 500 chart on
log scale][][/caption]

However, it is still interesting to see that we're bouncing right on the linear scaled chart. Even though it is technically wrong to use it on such long term chart, technical analysis itself isn't an exact science anyway. So I'm not dogmatic with the proper use of it. As long as it works and within logic, then it's good!

Update Nov 20: We broke down a major 10-year support yesterday at 820 on S&P. Are we going into the abyss?

Update Aug 6, 09: An even longer term view of the market. A technical analysis of 80 years ofS&P500.

[S&P 500 since 1980]: http://traderpau.files.wordpress.com/2008/10/spx1980.jpg [20 year S&P 500 chart on log scale]: http://traderpau.files.wordpress.com/2008/10/spx1980_log.jpg