Here comes the S&P 500 Support / Crash Test - Double Dip Watch

The S&P 500 is where we will see the future direction in the markets. At the moment share prices in the European indices have plummeted whilst contagion spreads to Italy from Greece. Support holds around 1,316  matching the 50-day moving average, this area is technically important.

On a longer term chart, the world renowned bearish head and shoulders pattern is forming, break of 1316 will deliver a crash of share prices to the S&P 500 200 day moving average. A fall below the 200d MA will signify entry to a bear market and thus the break of 1316 support may well be the first indication of the infamous double dip.