The market has sold off a bit more than expected here by taking out 1270 to the downside on global macro slowdown concerns. A deeper retracement to entice buyers is now expected.
We had a 210 pt drop in 2010 from the April highs of 1220 to the July 2010 lows of 1010. And a subsequent rally of 360 pts proceeded.
A similar drop from the May highs of this year would take us into the 1160 area. We have plenty of confluence in the 1200- 1160 to boot. I expect the market to make it's low around this level.
An estimated 360 pt rally should occur at that point which will take us into 1520 on the SP 500 somewhere during or after the 2012 elections.