The headline worries are over an extended US recession and rising unemployment. these worries are pushing the minerals and materials down in favor of more defensive names. for example, oils are down and PG and CL are up. At the same time, reports indicate that $US150 billion has flowed into mutual funds over the last 5 weeks. It wasn’t so long ago that we were talking about the $US50 billion per month outflows.

I will look for opportunity outside the US in the emerging markets/BRIC names as this downtrend matures.

S&P —
Long term indicators remain up and the 1025 target remains in place. The weekly has been in a pull back since reaching the January highs and the upside targets between 942 and 964. — this weekly retracement down is now at extended levels.

Daily – Price has triggered the down move today at 884.50. the next price objective down is 815.50. 871.75 is a recent low that will provide resistance, and downside pressure should end on 7/13. currently seeing some positive divergence, so may need to maintain close stops. A trade above 932 will make this down trade void. Dominant cycle is up.
(these conflicting signals usually mean sideways action)

Intraday Monday – a trade above 892.75 will start a retracement up of last weeks down move. I don’t expect it to go beyond 903.75-915.00.