Where Are We?

This chart is a monthly view of the S&P from 1997 to the present. In 2007, the S&P tried to better its 2000 high and failed. Right now, the market is challenging the 2002-2003 lows. As I pointed out in previous posts, this level is a 50% giveback or retracement of the super-bull that began in 1982. I think the probability is that this level will hold. However, it is heavily dependent on other negative surprises and therefore, is not something to make big bets on. If this level fails I think the S&P will go to about 660 which would represent a 60% retracement.