I don't do this very often but am going to throw out what I think is the most likely outcome over the next couple of days. This is pure speculation and probably wrong so take it for what its worth.
There are all kinds of cross currents going on related to horrible Asian economic data, European bank woes, and end of quarter. We have 1040 sitting as major resistance which we have bounced off 2 or 3 times.
Remember back in 2008. The 1040 than was 1200. We bounced off of it July and than bounced and bounced off of it again in September. Finally broke it and got alot of people short very quickly. Than we bounced again all the way up to like 1270 getting people slammed. Finally we broke it and plummet ted again.
So my speculation for whatever it is worth. We will break 1040 today with a close below it. Tomorrow morning we will go down somewhere between 1010 and 1030 before a big rally into Wednesday afternoon and Thursday morning possibly back above 1040 before kissing it goodbye for the final time.
Alot of money managers are wanting to raise cash at this point going into quarter end. The sell orders are lined up and eventually all who will have wanted to sell would have sold. The selling finishes tomorrow morning and volume dries up pushing the indexes up into Thursday morning at least.
Purely speculative conjecture. I woulnd't bet a 10 dollar bill at one to one odds that I was right but it is what is in my mind right now. That is why I have this blog. To put my thoughts in front of me so I can muse about them.