The S&P Futures dip below 1100 as Dollar strengthens

By IBTimes Staff Reporter | November 20 2009 1:10 PM

The S&P futures have ducked back beneath their highly psychological 1100 level, and it seems investors are finally reacting to this week's wave of negatively mixed econ data. Overall, despite encouraging CPI and Long-Term Purchases numbers, investors received negative housing, production, and consumption figures. Therefore, we continue to witness a slowdown in the global economic recovery. Investors have managed to keep the S&P futures above 1100 despite these data points due to weakness in the Dollar. However, the GBP/USD, EUR/USD, and AUD/USD have all reversed course today, giving investors ample reason for investors to send the S&P futures below 1100. Although, despite present weakness, the futures are trading slightly above 11/13 lows and have 10/26 lows along with our 1st tier uptrend to fall back on should technical conditions deteriorate. Our 1st tier uptrend line carries some weight since it runs through previous November lows. Therefore, a failure of our 1st tier uptrend line could indicate a retracement towards 1025 with 1050 serving as a technical cushion along the way. As for the topside, the highly psychological 1100 level becomes a technical barrier again along with 11/11 and 11/18 highs.

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Meanwhile, investors should keep an eye on the major Dollar crosses to monitor whether they can stabilize and recover from today's setback. However, if the Dollar strengthens further and gold follows suit, this could imply additional weakness in the S&P futures due to correlative pressures. Speaking of which, the EUR/USD should be active on Monday with a set of EU Flash PMI data points hitting the news wires. ECB President Trichet's press conference had a more aggressive hawk tone today, hinting that Monday's PMI data could print strong. In addition to the PMI data the U.S. will also release Existing Home Sales. The U.S. housing market has been worrying investors as of late, so Monday's release could have a greater impact than usual. Activity should pick up on Tuesday U.S. Prelim GDP, CB Consumer Confidence, and Fed Meeting Minutes along with a host of EU and British events. Therefore, it may not be too long until investors figure out whether the S&P futures can sustain 1100 over the near-term, or whether we witness a more protracted pullback in the markets.

Price: 1087.50

Resistances: 1095, 1099.75, 1107, 1112

Supports: 1082.5, 1076, 1070.25, 1061.75, 1052.25

Psychological: 1100, Previous 2009 Highs, 1075, 1050