The S&P 500 futures got quite a boost off of the 1400 level during the Tuesday session. This session would have featured futures trading without the actual underlying stock market trading. This of course is a result of the hurricane named Sandy, and the damage that it has done across New York and various places in the northeastern United States.
However, it is become obvious the 1400 is a “line in the sand” for buyers in this futures market. Is because of this that we believe the S&P 500 will do quite well in the short-term. However, we see this as a market that is in the process of breaking down, and 1400 is the very last stand by the buyers. If that level does give way in the future, this market will absolutely come undone.
We are short-term buyer of the S&P 500 futures, but do not plan on hanging onto the trade for more than a day or two at the most. We think eventually that the downside takes back over, and as it does there will be a general decline in the stock markets overall, the S&P 500 included of course.