S&P Short- and Intermediate-term Trend

As I have talked for couple of months, the US stock markets have been entering into a significant correction. So far my prediction has been correct. S&P 500 has presented a bearish head and shoulders pattern as shown below. It broke its neckline around 2080, which becomes its resistance now. It was supported at 2040 last week. Now the markets are quite oversold short-term and are ready for a meaningful rebound. At the moment, the most significant headline risk is obviously the Greek drama. If Greece cannot make a deal tomorrow and is heading to a Grexit from the Euro zone, the market will go down straight. But I think there is a good chance they will strike a deal and Greece will remain in Euro. With this assumption, here is what I'm thinking about the S&P trending in the very near term (1-2 weeks) vs longer term (about 2 months). The solid pink lines are the few support lines for S&P and the green dot line is the likely pathway for S&P in the next couple of months.

In a nutshell, in the next 1-2 weeks, S&P will likely go up to meet its 50 day MA (red line) around 2100 but then it will resume its downtrend again and test various support lines. The most likely scenario for me is that S&P will be bottoming around 1990-1950. But if the situation becomes really ugly, then it is also possible S&P may go down towards the bottom of the last Oct correction below 1900. We may likely not see this but we need to keep this in mind as well.

 Based on this prediction, here are a few suggestions for you to consider if you also believe what I'm saying:

• As I have said many times in the past weeks, BE CAUTIONS to buy at the moment. Only consider those solid value stocks for long-term that you are not worried about the short-term volatility.
• For your existing long-term positions that are still in good valuation, no need to worry about them as this is a natural market correction, which won't last long. We are still in a secular bull market that will continue for a while for sure. If your value stocks have become very expensive, then a correction may knock down its price more severely. Selling portion of it may be considered as you can always buy back later with a lower price. But don't simply sell without understanding their valuation.
• For short-term trading positions, the next week or two's rally may give you a chance to lock in your gains. Again, a couple of  things can be considered:

                - sell those that have good gains already
                - use trailing stop to protect their gains. For more info on stop loss, see here.
                - if you are savvy about options, you may consider using options to hedge against the possible decline.