Internet finally came on, and since I have not been able to sleep due to all the personal stuff going on, below is the post that was intended.
While Time Warner Cable keeps sucking the big one, the SP500 looks to want to test 1220-1230. The 1220 is from the daily chart. The 1230 area is from the weekly.
The bounce we got today was facilitated by the developments over the weekend, as highlighted in my tumblr post 'EU positives'. First, Bernanke talks confidently at Jackson Hole while extending a Sept Fed meeting, adding to the speculation that Bernanke is coordinating a global response to macro events. The next day Lagarde speaks to the fact that EU banks need to consolidate with mandatory substantial recapitalization. She also said she discussed her views with President Obama. (This is global leaders communicating. Next step is action.) After her talk at Jackson Hole two large Greek banks announce that they will merge with Qatar Investment Authority providing re-capitalization (and taking 15% of the new entity).
With EU bank consolidation taking place, an amended EFSF and an ECB facilitating sovereign debt there may be no cracks left for the hedgies to attack for a few months. Allowing markets to continue to rise, especially after the EFSF vote. We should still see some choppiness until the EFSF is officially amended, as this is a key aspect for the EU to regain stability. The vote on the amended EFSF takes place in late Sept as the target date. Although it is expected to pass, the choppiness should not allow a re-test of the lows (unless it does not pass). And with the EU banks merging and re-capitalizing at any potential moment, these -5% moves due to bank concerns, should also be limited.
I am actively trimming the additional long positions I entered as the market collapsed. Around 1230 I will look to play and re-position my protection to the SPY Oct 122 puts.