U.S. Equity General

As the privates and seargents get bloodied up, the general stands at the rear with a few scratches.  The U.S. equities have been holding up the best to the threat of QE tapering and global slowdown.  This past correction after the FOMC meeting has been a minor battle, nothing serious enough to endanger the general.  You can only injure and kill the general if you have a major battle.  The S&P 500 will not go down much unless you get that major battle. 

The privates (emerging markets) and seargents (Europe) are always going to be in the line of fire, in even the small battles.  Emerging markets got battered, and Europe is of course underperforming the U.S.  This past wave of selling should provide a few weeks of benign markets, before we get the next bigger wave.  

During this benign period, which should be all of July, I foresee the S&P working its way up to 1650, with the emerging markets struggling to rebound.

So if you want to short this market, you should short China/emerging markets.  If you want to go long this market, you should go long U.S. 

By the way, Egypt doesn't matter.  It just provides a possible short opportunity for crude oil.