The S&P futures are trading positive right now despite much weaker than expected UoM Consumer Sentiment data. The S&P's resilience is a bit odd considering the EU's GDP data also printed weaker than anticipated. Therefore, what we take from current strength in U.S. equities is that the widening of the U.S. Trade Balance indicates an increase in demand for imports, and thereby a higher rate of domestic consumption. Hence, the larger than expected decline in the U.S. Trade Balance might even be counteracting the disappointing Consumer Sentiment numbers. As a result, the S&P futures are heading back towards previous 2009 highs along with the highly psychological 1100 level.
Meanwhile, investors may opt to wait for Monday's key Retail Sales data before making a more solid conclusion about the present state of U.S. consumption. The Retail Sales data will print along with the Empire Index and Business Inventories. Furthermore, Fed Chairman Bernanke will address the public and Japan will announce its Prelim GDP late Sunday EST. Hence, it seems next week may kickoff with a bang with an increase in volatility. Investors should keep an eye on the EUR/USD's ability to strengthen from 11/06 lows as well as gold's ability to continue its upward momentum above $1100/oz. Any considerable technical development in either could serve as a leading indicator for the S&P futures due to their positive correlations.
Technically speaking, the S&P futures have limited topside resistance in the form of 1100 and previous 2009 highs. Therefore, the potential for an accelerated near-term breakout exists. As for the downside, the S&P potentially has multiple uptrend lines serving as technical cushions along with 10/22 and 11/06 lows. Additionally, the psychological 1075 and 1050 levels could work in the S&P's favor should they be tested.
Resistances: 1098.75, 1100, 1102.5
Supports: 1089.5, 1082.5, 1074.75, 1067.25, 1062
Psychological: 1100, 2009 Highs, 1075