On Friday morning bulls tried to due something due to Facebook IPO but by the end of the day they gave up another 10 points on SPX. This was the third week in a row on the downside, three weeks that saw SPX losing no less than 125 points. What its worth mentioning is that weekly DMI has turned negative on Thursday indicating that even the long term trend may turn bearish soon. And indeed market is only 15 points above SMA 200.
How much is the market going to plunge? This is hard to anticipate. It all depends if Greece is going to remain in the European community or not. If I have to trust the "head and shoulder" pattern I could say that market is going to plunge to 1,290 (remember how this prediction functions for HS: you measure the distance between the top and the neckline and that is the drop you expect from the neckline on the downside). SMA 200 is around 1,280 and even more important the bull market uptrend line is around 1,250. So from 1,250 to 1,290 we have a whole area that may function as a support level. But this doesn't take into account an eventual Greece exit from the European Community. If Greece goes out of the Community anything could happen from even a more drastic correction to seeing market plunging once again in a bear market.
Gold and silver had two good days but the bearishness persists. In a way silver looks more vulnerable than gold, it has lost almost 50% from its highest value but at the same time silver is still above the bull market uptrend line that is around $25 while gold plunged bellow this uptrend line. Weekly DMI for both silver and gold is negative and both show a "death cross", more obvious for silver.
The dollar went down for two days in a row giving gold and silver a break but ended up for the third week in a row. The strength in dollar is also spooking the metals&ironing stocks, WLT, X, MT, MTL, CLF.
Coming back to Greece, I heard the world leaders two days ago at the G8 meeting promising they will do whatever necessary to keep Greece in the European Community. This may please the market at least on short term. We'll see tomorrow how the market is going to react to such promises.