The S&P futures logged a sharp late session selloff on Monday to end the day on a negative note. The downturn came in reaction to news that American Express is experiencing a rising delinquency rate on its consumer credit cards. This news reflects the worry that the debt of U. S. consumers is rising in the face of higher unemployment coupled with skyrocketing foreclosure rates. Furthermore, all of the U. S. data released yesterday came in below expectations.

The Empire Index number was the worst on record while Industrial Production and foreigner purchases of U. S. securities are on the decline. Therefore, Monday provided ample evidence to reignite investor concern after last week's impressive rally. The U. S. will release more significant economic data on Tuesday morning, so we expect the rising volatility to continue. America will announce Building Permits, Housing Starts, and PPI.

If all of the data points are worse than expected like yesterday, we could see equities head south in a hurry. As we mentioned in yesterday's analysis, don't forget the rally last week was based on psychological encouragement from bank CEOs and global leaders in an effort to boost investor and consumer confidence.

However, bank CEOs are providing guidance based on the first two months of 2009, before the latest leg down took place in the stock market. As we know, a quarter consists of four months, not two, so these words of encouragement should be taken with apprehension right now. Correlation wise, crude and U. S. treasury bonds are unreliable at present due to the different forces taking hold of the supply side of the equation. However, gold and all of the major Dollar crosses reflect a slight hesitation and unwillingness to fully commit to a bottom in U. S. equities until further confirmation from the S&P futures.

The S&P futures are presently battling with our 2nd tier downtrend line as all eyes are on the ticker waiting for the pending economic data releases. Fundamentally, we find resistance of 761.5 with additional resistances hanging at 765.5, 772.25, and 776.75. To the downside, we see support of 755.5 with additional supports sitting at751.75, 748, and 744. The S&P futures are currently trading at 757.25.