The S&P futures brushed aside negative unemployment data, piecing together an impressive rally on the back of better than expected existing home sales and manufacturing data.  The economic crisis began with the collapse of America’s housing market, so stabilization in housing gives investors hope the worst of the economic crisis may be behind us. 

Furthermore, improvement in the housing market gives investors confidence that the stimulus initiatives enacted by the U.S. government will be successful.  In addition to the positively-mixed economic data, investors found comfort in a constructive meeting between America and China at the G20.  Dubbed the G2, the relationship and cooperation between China and America are of the upmost importance in the recovery of the global economy.  Lastly, financials are experiencing considerable strength Thursday morning as the FASB plans to vote on a revision of U.S. accounting standards.  The revision should help financial institutions value some of the toxic assets on their balance sheets, giving investors a better picture as to the extent of the damage caused by the credit crunch. 

The S&P futures are reacting favorably to all of the news and data flooding the news wires, sprinting through the psychological 800 level towards 2009 highs.  The EUR/USD, GBP/USD, and crude futures are following suit, giving an indication that the S&P futures may have what it takes to set new 2009 highs.  If this is the case, we see some tight consolidation in the near-term with investors cashing in some profits as the futures approach the psychological 850 barrier.  Despite any near-term barriers, the S&P futures are proving this rally has legs by rising through all of our downtrend lines. 

Therefore, it appears the rally could take another step forward.  However, the futures still need to brave through 2009 highs, and until they do, all bets are off.  That being said, investors could wait for tomorrow’s Unemployment Rate release along with ISM Non-Manufacturing PMI and Non-Farm Employment Change.  Fundamentally, we find resistances of 829.5, 834.75, 840.25, 845.25, and 850.5.  To the downside, we see supports of 821.5, 815, 809.25, 804.25, and 799.75.  800 becomes a psychological cushion again with 850 serving as a psychological barrier.  The S&P futures are currently trading at 825.25.

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