Floating Trial Balloons

The markets around the world seem to be waiting on further steps by European officials to stop the banking crisis gripping the area.  Many” trial balloons “ have been floated by the media over the last week ranging from a E.U. banking unification, IMF bailout of Spanish banks, use of the ESM, another LTRO round by the European Central Bank, direct Spanish aid to their banks by issuing bonds, and the potential of Euro bonds being issued.  Pick your favorite story and investors will jump back on the potential solution(s) as a reason for a short-term rally.  I look for the market to continue to decline as the S&P 500 has broken below the 200 day moving average late Friday.  While a bounce back above the 200 day is possible, the relief rally should be used to sell as I still expect the S&P 500 to continue to decline to around the 1213 level. I made a rough calculation using an equal point total decline to the last wave down.  I look for a bounce after the level is reached.