The S&P futures have reversed from earlier gains after the U.S. government announced it will release its proposed legislation for the finance industry. Initial reaction to some of the headlines is negative as the government proposes means of reducing the systemic impact of too big to fail institutions while potentially decreasing the influence of the Federal Reserve. In addition to the news of new legislation, Bove downgraded three more banks, including USB, FITB, and STI. Financials are getting hammered in reaction to the combination of these events, and the U.S. markets are following their lead. As a result, the S&P futures are getting uncomfortably close to our 1st and 2nd tier uptrend lines. These uptrend lines run through October lows and should be viewed as important technical cushions. A reversal beneath these uptrend lines could potentially result in near-term downward movements towards 1010 and the psychological 1000 level. Therefore, investors should keep a close eye on the S&P futures for any significant destruction in regards to technical supports.

Meanwhile, today's downturn in U.S. equities places more weight on upcoming economic data. Though data is quiet today, the wires will heat up tomorrow with the release of CB Consumer Confidence and HPI data. On Wednesday investors will receive key CDGO data along with New Home sales, not to mention Thursday's release of Advance GDP. Therefore, we should be headed for a busy trading week, to say the least. While the S&P futures have been buoyed by surprisingly positive econ and Q3 data, any negative reversal in economic fundamentals could result in the accelerated losses we mentioned before. On the other hand, positive releases could provide a much needed boost to an S&P which seems to be trending lower.

Price: 1071

Resistances: 1076.5, 1082.75, 1088.75, 1094.5, 1098.25

Supports: 1070.5, 1063.25, 1056.25, 1049

Psychological: 1100, 1075, 1050