The main U.S. stock market indexes lost between 1.1% and 1.9% yesterday, as investors increasingly feared about the debt crisis and its potential consequences for the economy. On the other hand, investors should wait for the quarterly earnings season, hoping for some sentiment turnaround. The S&P 500 index broke below the level of support at 1,666.58, marked by 61.8% retracement of the September move up (Fibonacci Golden Ratio), which is a negative signal. It also closed below the September 10 daily gap up of 1,672.40-1,674.32. The nearest important resistance is at around 1,680, and a potential support level is at 1,630-1,650, marked by the late August consolidation, as we can see on the daily chart:

Expectations before the opening of today’s session are positive, with index futures currently gaining 0.3% vs. yesterday’s closing prices. The European stock market indexes have been mixed. Investors will now wait for some economic data announcements: Wholesale Inventories report at 10:00 a.m., FOMC Minutes release at 2:00 p.m. The S&P 500 futures contract (CFD) broke below the support at around 1,665, extending its recent downtrend. At this moment there are no confirmed short-term trend reversal signals, as the 15-minute chart shows:

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Thank you,
Paul Rejczak