Two Possible Scenarios For S&P500 In July 2010

I will give you two scenarios that I think have a good chance to become reality with in first half of July. As you know S&P500 broke the 1040 support level as I anticipated. If S&P500 stays below 1040 for a couple days it will tank to 1015, and if it would not hold it will tank to 950 or lower. As I mentioned many times before 1100 is a deal breaker. Bears must keep the S&P500 below 1100. I don't see any possibility of such a rally in coming days, therefore I will remain a bear.
On the other hand we could get a bear trap, it means S&P500 could move below 1040 for a couple days, then big institutions buy the future market over night and the S&P500 gaps open higher , if this scenario happens we should witness a big short squeeze; there are some average investors who go short and they usually get nervous as soon as they see some buying, therefore a short-lived rally is not out of picture. If S&P500 gets above 1056 you should cover risky short positions and move to the side line. These moves should last a couple days and would be a good opportunity for professionals to add to their short positions. If we get the short squeeze rally, look for 1070-1090 as possible resistance levels in coming weeks.

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S&P500 Technical Analysis (06/24/2010)