With the news today from Greece, the other financial dominoes will be in the minds of bond investors soon. The announcement of the loss at J.P. Morgan will be interesting as to what position they took a loss on. Was the position on Greek bonds or other hedges? The top five financial institutions for derivatives I mentioned should be monitored closely for upcoming announcements. No change as of now on the target of 1290 on the S&P 500.
I will review the S&P 500 target to see if a lower target is possible at this time. However, in technical terms this is only the start of the downturn. This is possibly only wave one of major wave three to the downside. We are due for a wave two bounce after wave one only after a full wave waves down are completed. A wave two bounce will like retrace .618% of the final low at 1290 or lower. This downturn is in the very early stages with more trouble ahead likely this fall.
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