Bearish Tones
S&Ps put in a new low at 1130 this morning. The longer the market trades below this level, the more bearish a tone it sets. Overall, this is a quiet market, and locals are generally nervous about keeping short positions. Remember, tomorrow begins the two-day FOMC meeting, so expect activity to quiet down significantly from this afternoon through Wednesday mid-day.
Earlier, S&Ps broke through our support area at 1132.50-1131.50, partly in sympathy with weakness in the Dow and the banking sector. At higher levels between 1133.40 and 1135.70, we saw little interest in the trade this morning.
Nasdaq futures found some support at 1555, which is the afternoon low area from Friday. Below this, we would expect support around 1548-1542.