Lower Still…

S&P futures are trading at 1176.30, which is down
4.50 on pretty solid volume of about 2700 contracts overnight. On the upside,
we have resistance between 1177.50 and 1179.50. If we get above 1180.50, we’re
looking for a choppy, two-way trade up to 1185. Realistically, 1180.50 to
1185.50 can be considered a neutral zone. If we get above 1185.50, we’re
looking for 1190.

On the downside, the first target is 1171.50 to 1168.50. The Aug. 10 low is 1171.50, and 1168.50 is the July 24 low. Below that, we
would expect a very choppy trade down to 1160 with minor targets and support
at 1164.70, 1162 and major support at 1160.50-1158.

Nasdaq is trading at 1557 down 19.50, and on the low of the
overnight session. We are going to open below our critical support zone
between 1588 and 1570. This will now turn into resistance this morning, and we
would not be surprised to see this zone trade again today. How the market acts
in this zone will be critical moving forward.

On the upside, above 1588, we have resistance between 1594
and 1607. In other words, the area from 1570 to 1607 can be viewed as
resistance, and we would expect a very choppy two-way trade in that area. If
we were to reverse and get above 1607, we think that a rally could ensue, and
we would look for a move toward 1640.