S&P - The quick, and dirty

Im sure there are many scenarios out there for higher/lower broad market prices, with one strong argument being that the last 6 months of an election year tend to be very bullish. But looking strictly at the technicals it paints a different picture.

For those fans of fibonacci, using the March 2009 lows as a base, the peak into April 2010 was corrected to 38% (to 1000), then again the peak into the summer of 2011 was corrected to 38% (to 1100). If, and thats a big IF, the current peak from this spring was the end of the bullish 5 wave sequence from the March 2009 lows and the S&P was to correct to 38% Fibonacci retracement then we are looking at an ultimate target around 1130.

Important levels to consider on the way down in case something of that magnitude does unfold over the coming months...the 200day moving average currently near 1300, 1250/60 which represents the launch area in December 2011 as well as the retest in early June 2012, and 1200 which is a big psychological area and that would likely have QE3 talk furiously buzzing. The only thing that would negate my negative bias for the broad market in the coming months as described above is a close over the recent highs of 1368.

Just something to think about after the fireworks of the past 2 summers. After all, isnt the definition of insanity doing the same thing and expecting a different result?