That formation on the chart (still forming) is a symetrical triangle with a 75% chance of it breaking to the downside. I know of this formation quite well because BAC was in such formation months ago. If the price breaks to the downside then the target is 634. If it breaks to the upside, then we get 1250. 75% chance down, 25% chance up. My P/E earnings calculations suggest that the SPX is fairly valued around 500-600. Buffett is placing his chips by the 25% section.