I think the market has to have a major panic before a version of QE3 would be announced. Without that, there is no political support.

S&P 1200 is indeed a key level - we are now into a trading range from 1120-1200. A move out of the range would be meaningful.

On a side note, my market internal indicators have turned positive despite today's pullback. We'll see if it holds through tomorrow. If it does, we should have 2-4 weeks of positive markets - probably gets us to 1250-1260. A lot of resistance there, though.