Hell must be freezing over.  With a market that since early 2009 has trained speculators to buy right before the close to flip on the open as the majority of gains have come in the overnight session, it has become second nature to see either a flat or gap up open in U.S. markets.  Hence seeing two gap down opens in one week, without any news event (i.e. Middle East issues, European sovereign debt issues), is a strange event indeed.  I cannot remember the last time it happened, since getting even one gap down in a week is now rare.  I would assume it was summer 2010 pre-QE2 promise at Jackson Hole, Wyoming.

While some might blame today's combination of higher weekly unemployment claims (back over 400K), plus continued inflation pressures in the PPI - futures were down well in advance of these two reports at 8:30 AM.  There was a scathing Congressional report on the banks during the crisis, but really who cares - sticks and stones don't break their bones.

I continue to point to S&P 1307 - the 50 day exponential moving average - as a key line of support.  The S&P 500 has bounced off this level twice in 2 days but looks to gap down below it at the open.  Ironically, the 50 day simple moving average has been exactly where the market has closed the past 2 sessions - so I posted both on the chart below.

[click to enlarge]

In the comments section yesterday, a reader asked what the next support would be if we begin to break down.  I offered the 100 day exponential moving average - currently around 1280 - as this was the support in the mid March swoon as shown above.  If we fall to that level and don't bounce, I'd offer the original thesis I outlined quite a few weeks ago of a retest of old lows in the 1240s.  Holding that level and bouncing would be a bullish event, as we'd create a double bottom.   If the 1240 level breaks... well then we have a very interesting situation.  But these are the areas to look at over the intermediate term.  With the market creating what now appears to be a double top, I'd expect some more downside in the coming weeks.... the question is how far.