The recent call on the market and the Euro has been correct with the S and P 500 dropping to the 1290 area and the Euro now below $1.24 to the U.S. Dollar. I expected a bounce at 1290 and that happened while I was away. The S&P 500 appears to have more downside directly ahead to a target of 1213. The Euro is completing a five wave down structure looking at a target of $1.19.
From these levels, a bounce should occur leading the S&P 500 to a .618 bounce to the 1344 level. The Euro should retrace at least .382 to around the $1.29 area.
The headlines are troubling with major banking liquidity issues in Spain along with government bond yields now over 6.68%. In Italy 10 year yields are now back over 6%.
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