Bounced exactly off one fib fan to the next fib fan above, also intersecting major fib retracement...Next week will be huge to see whether or not the Fib Fan and Level can hold or be breached significantly...breaching of the fan line would be pretty bullish short term...we if the level can hold, that seems to be pretty bearish....alternatively we could stay pretty flat hugging the major fib level, but below the fan line
To close the year, we could see 1385 (green area), which would be a move to the next fib line up and be a major retracement, and even a potential wave 1 of a new bull market (or wave B of the current correction)...this woudl require a major break of the downward channel, which could be fueled by major governement manipulation leading up to the election and holiday shopping season.
Alternatively, If the Bears continue to rule, a retest of 1170 fib level and also fan line by the end of the year seems likely. If Obama were to win, I can see this fueled by the selloff in equities for tax purposes that is likely before the year ends. Longer Term, I think we will break the fan lines and go down to 1077 (61.8 level) and possibly all the way to 800 wiping out the gains of the last 8 years. Given that the 90s new-economy actually produced significant economic growth and innovation, albeit in a bubble environment, the 2000's economic growth has largely been premised on highly suspect financial activity, Military spending, and Real Estate. No game changing innovations along the line of the Internet have really occured during this time, so the SPX going back to 2003 levels isnt really that shocking in the grand scheme of things.