As long as S&P is rising in a corrective pattern (overlapping waves) and as long as it remains below 1422, I expect June lows to be broken. I see the top being formed until August 1st. After that I expect a large decline towards 1250 at first and then maybe 1150. Confirmation of this view would be the break of 1345 and 1310 support levels. Taking consideration of the time variable, the decline from 1422 until June lows, will have the same length with the rise from June 4th to August 1st (FOMC Rate Decision).
I think FED intervention (QE3?) is more possible to come after the decline in the index. In the weekly chart S&P is crawling on top of the lower pitchfork support. Bernanke will announce QE3 but I believe he is trying to delay it as much as he can. If the consequences of such measures will prove that it does more harm than good is another riddle that economists battle around it.
From the elliott wave perspective I like to keep things simple. Is the rise from June 4th impulsive? No. Is it corrective? Most probably yes. When this correction ends, another wave down at least as big as the April-May decline will follow.
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