S&P 500 (Updated)

A real quick chart here.  Just wanted to pull something from an article and show you how this could play out.
http://www.oftwominds.com/blogmar12/SPX-Nikkei2-12.html

There's 3 scenarios that I see here labeled.  Most likely would be #2 in my opinion, but #1 and #3 can't be ruled out as infinite money printing ("liquidity") could be provided to force the markets higher, or a complete lack of liquidity could tank the markets.

Scenario #1 would be a breakthrough to the upside in the next couple weeks or so.  This seems unlikely as Greece needs to make a payment March 20th for their bonds and they don't have the money...at least that I know of.  The ECB made a pretty incredible "loan" yesterday to it's member banks to either help keep the market going higher, or as support in case Greece defaults (not likely) or the bond holders take a large hit from a haircut on the bonds (most likely).

Scenario #2 seems more likely as at least until it hits the major downsloping line of the past 10 years.  Then higher or lower.  My bet would be on higher at that point.  The markets are manipulated right now, and I don't see that changing any time soon.

Scenario #3 seems the most unlikely due to the fact that it could have already happened in November and the central banks intervened to make sure it didn't.  I don't know why they would stop now, but this scenario could happen if Greece officially defaults (based on the ISDA's determination...very unlikely) and the central banks decide to not intervene.  In that case, 2008 all over again.

So there you have it...my take on the next things to happen in the marketplace is #2...a drop of about 15-20% to erase the gains of 2012, then a steady climb back up to resistance.  What happens after that depends on what time of the year it is I think.

UPDATE - 10:30PM:

Just when you think things can't get any more bizarre...

http://www.bloomberg.com/news/2012-03-01/israel-to-begin-investing-reserves-in-u-s-equities-today-1-.html

So the Bank of Israel decides that keeping money in bonds and other currencies is not the best option.  It needs to get better returns (and more risk).  Let's prop up the US stock market.

Obviously this will have an effect on the prices above...maybe scenario #1 isn't so unlikely any more.

I also need to point out the fact that a central bank is now out in the open about investing in things other than traditional items like currencies, bonds and gold...we're now up to companies outright and stocks.  

Bye, bye free market!  It was nice knowing you.