Market Recap and S&P target to watch

Its been a tough trading market lately, unless you got it right. Here is what I'm looking at. The first chart is the daily with an inverted flag/pendant marked on it. It looks like a decent setup but the pole goes really far lower. We would have to see what may confirm such a drastic move lower. I'll try and explain all the lines drawn on the chart next.


First see the monthly chart below. In order of the levels. The two green support/resistance lines are from the peaks of April (1219.8) and Feb (1044.5). The red line was intermediate support at 1131 but was broken easily recently, except today where the sell off held on to it. Now look at the larger Fibonacci lines drawn in yellow and pink from the peaks in in 07 and May 11, It seems that there is confluence at the 50% retrace on the larger fib and the 38% on the recent fib levels, this level is near 1010.3 and is also the near term low of Aug,2010. This might be the level the markets might look for. Below that is 950 which is a longer term support and would also be the pattern completion.


Some commentators have set targets for 8%-10% decline from current levels at or before Labor day which is Sep 5. What can take us there is the Eurozone crisis which would require a separate comment at this point. Also, the economic news and downward revision of the GDP that will be out next week. From the high to low, this year we are down 16%, and it could be that Ben Bernanke starts acting on QE3 if we dip below 20% or more. All this does appear to point to a the chart pattern target of 1040 or near. We shall see.