The Russian stock markets have been halted – lock limit down. Confidence continues to bleed OUT of the U.S. markets as the threat of more financial sector problems coming from Europe and Japan appear to be building.
This added to the growing uncertainty of the U.S. auto makers, economic reports of more manufacturing sector weakness, and now Kansas does not have enough money to issue tax refunds and may not be able to meet payroll obligations this Friday. Kansas, the entire state.
Confidence in Treasury Secretary Tim Geithner is falling apart by the seems it would appear. Today is the day the $780 Billion stimulus bill will be signed into law. So far the market is saying ‘so what’.
S&P 500 futures have continued to decline throughout the overnight hours and are currently BELOW a critical level of 797. At this time there is some trend line support holding the futures at around 793.
Next major support level is 743 (November lows). But, what I continue to put emphasis on is the break of the triangle pattern that had been taking shape over the past few months. A solid close below the triangle line would add significant confidence in that pattern turning into a ‘confirmation’.
The result of that pattern confirmation provides us with a new price target for the S&P 500 and that target is 545 in coming weeks or months from now.
S&P 500 Futures - 5 Minute Chart
S&P 500 Futures
