The S&P futures are heading south as investors sell on the news of more positive Q3 earnings coupled with very strong Existing Home Sales data. However, investors have yet to see a significant improvement in unemployment, and we should keep in mind that both PPI and Building Permits printed below expectations earlier this week. Hence, although Q3 earnings have been impressive, it seems the Fed may have limited ability to drain liquidity over the near-term. Meanwhile, the S&P futures are having a lot of trouble with the psychological 1100 level, and it appears the bulls are a bit worn out. Investors were caught off-guard by the much weaker than expected Prelim GDP data from Britain. The Pound is getting hammered as a result, a negative development for U.S. equities due to their negative correlation with the Dollar. However, the Euro is holding strong after EU PMI data printed positively mixed. Furthermore, the USD/JPY's rally is heading past 92 while leaving its psychological 90 level behind. We saw U.S. equities move in a negative correlation with the Cable earlier this month, so investors should be paying closer attention to activity in the Euro and gold for the time being.

That being said, 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 result in accelerated near-term losses towards 1010 and the psychological 1000 level. However, bulls shouldn't get too worried yet since technicals are still supporting uptrends not only in the S&P futures, but also in the EUR/USD, AUD/USD and gold. After all, a selloff on positive earnings is usually a symptom of overbought conditions. As for the topside, 1100 remains the key technical barrier separating the S&P futures from substantial gains.

Price: 1077.50

Resistances: 1085, 1089.5, 1094.5, 1100

Supports: 1075.5, 1070.5, 1066, 1058.75, 1051

Psychological: 1100, 1075, 1050

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