When the market started breaking down in late September, the S&P fell below long-term support which was marked by the lows from 2009. You can see the 6-year weekly chart above with the trend line drawn in green. The recent break is clear to see.
When identifying a trend-reversal, a technician will often look for an asset to back-test prior support or resistance before resuming its new primary direction. Using the graph of the S&P as an example, we see that the index broke major support on heavy volume back in September. Momentum indicators had been deteriorating for weeks so all of the technical evidence was pointing to a trend reversal. (Keep in mind that this is a major market index and that the topping process usually takes a long time so expect lots of whipsaw action) After bottoming on October 15, the S&P has staged a rally all the way back to the underside of that green line. This is what I'm referring to when I say that the S&P has successfully back-tested previous line of support (now resistance).
We're now at the point where the rubber meets the road. If the S&P continues to rally up and over that green line, then the long-term uptrend remains in place and bulls are in control. If, however, the S&P is stalls and turns lower, we have strong evidence that the trend has changed to the downward direction.
I admit that the rally we've seen over the last two weeks was more than I thought possible. Be that as it may, I'm focused on what the index does now that it's back-tested the previous trend-line. I want to point out that volume has been horrible on the recent rally and that the MACD is still trending lower despite the S&P's recent 10% gain.