The S&P futures are registering a large leg down, sinking below their highly psychological 1100 level once again as investor uncertainty increases around the globe. Problems in Greece are resurfacing with S&P and Moody’s stating they are considering downgrading Greece’s debt should the government not successfully implement its austerity measures soon. Additionally, Greek government officials are starting a verbal battle with Germany, which may not bode well for EU relations. Particularly since Germany has been the party vocalizing its dissent in regards to bailout out Greece. The concept that EU relations are souring is adding downward pressure on the risk trade as investors fear that the union will not bail out Greece in the long run. Uncertainty in Greece has rocked the risk trade in general, sending the Cable, Aussie, and USD/JPY lower as well. The S&P futures are participating with their negative Dollar correlation kicking in. Meanwhile, U.S. weekly unemployment claims registered an unexpected increase. In fact, unemployment claims are almost back to their psychological 500k level. The reversal in unemployment claims is a disconcerting development and is likely weighing on the S&P futures as well. Durable goods data printed mixed with the core underperforming the headline. Hence, on the surface it seems demand for vehicles picked up while consumption of durable goods in general tailed off, confirming the disappointing retail sales and consumer confidence data as of late. Meanwhile, volatility could continue through the end of the trading week. The UK will release Revised GDP tomorrow followed by U.S. Prelim GDP data, and both have the potential to move markets.
Technically speaking, the S&P futures have multiple downtrend lines serving as technical barriers along intraday and 2/24 highs. As for the downside, the S&P futures have technical support in the form of 2/14 lows and the psychological 1075 level.
Price: 1088 Resistances: 1089.75, 1092, 1095.25, 1098.5, 1101.5 Supports: 1086, 1084, 1081.5, 1078.75, 1076.5 Psychological: 1100, February highs