Now that we’re off the 925 S&P 500 support area we see a rolling top forming on major indexes here and around the world. A pullback in equities and commodities may occur as a result, providing opportunity to further short the market and gain more exposure to commodities during buying opportunities.
I believe the short term target could be as low as 900 on the S&P and interim if we see a large correction we could retest the 875 area. The main determinant factors here will be the news flow, economic data and hunger for raw materials.
The correction could also remove the possibility of the 50 day moving average crossing above the 200 day moving average, which fund managers are looking for as further indication that the market is worth buying in to at these levels.
Bulls continue to cling on the notion of green shoots, but the green shoots look more like poison ivy according to many traders who are closely tuned in to the technicals and fundamentals.