The SPX is reversing sharply from a secondary attempt at 1220 resistance which prevented a challenge of the 1224 – 1228 Fibonacci retracements and the 200 week SMA. Deeper setbacks are expected as it is unlikely that the Greek hang over is expected to dissipate. Germany remains the prime mover in any aid effort and voter enthusiasm is still a concern. Greek voters remain displeased with measures that are necessary to get their country’s fiscal house in order. The impasse has hand cuffed the global financial system as concerns of contagion accelerate. Government officials need to look over their shoulders for ratings agencies which keep moving the goal posts. A second tier of troubled sovereign debt stands right behind Greece which makes it very necessary to do it correctly. For the moment a challenge of 1176 followed by 1150 may be welcome news for the seasonality players.
Disclosure: no positions