Recent price actions in SPX suggest that a wave 4-down correction off the October 2011 low or an outright trend change likely has started (Chart 1).
Current target for a wave 4 correction is around 1315-1340. Note that wave 4 retrace is likely shallow and probably time consuming in order to alternate with the deep and sharp wave 2 retrace.
A decline much below that level would substantially increase the likelihood of a trend change and the recent rise above the long term resistance zone being a fake breakout. See Chart 2 and discussions in Long term resistance (3/16/12).
Regarding the current decline. The best count at the moment, in my view, is a zigzag decline followed by an expanded flat rebound (Chart 3, blue). Alternative short term counts are labeled in green and red.