The S&P futures continued their rapid decline on Tuesday, setting new 2009 lows in the process. The futures have popped back up to the psychological 700 level on Wednesday morning as investors are fighting to keep the hope of stability alive.

For if the S&P gives up on 700, the selloff could gain speed in the near term before finding a new bottom. Housing data was just horrible yesterday, for lack of a better word. Pending Home Sales declined by -7.7% while analysts were expecting a downturn of -3.0%. To make matters worse, the last release was revised downwards to -4.8%.

Therefore, the Obama administration's housing stimulus has either not filtered into the system yet, or the stimulus is having little impact. Additionally, vehicle sales are plummeting for U. S. automakers. Therefore, GM and Chrysler will need every penny of the bailout package they're requesting, or the automakers may have no choice but to file for bankruptcy.

Conversation and speculation concerning bank nationalization and systemic risk are still circling around the campfire. High uncertainty should prevail until a broad sweeping solution is introduced. High uncertainty normally yields declining equity prices, as we've seen throughout the economic crisis.

Today the U. S. will release more data, including ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, and Crude Oil Inventories. Furthermore, Treasury Secretary Geithner will address the public while the Fed releases it's Beige Book, giving investors an inside look into the government's sentiment concerning the economy.

Meanwhile, correlations are making positive developments for those long the S&P. Crude futures are surging through our 2nd tier downtrend and uptrend lines while Gold continues to experience profit taking. To top the cake, the 30 Year T-Bond futures look to post more losses. Hence, the correlations are pointing towards a near-term recovery in the S&P futures, which we very well may see as investors try to hold onto 700.

Fundamentally, we find resistances of 709 with 2nd tier and top-end hanging at 717.25 and 725.5, respectively. To the downside, we see support of 697.75 with 2nd tier and bottom-end sitting at 688 and 682, respectively. The S&P futures are currently trading at 703.00.

Copyright 2009 FastBrokers, Latest Forex News and Analysis for Forex, Bullion and Commodity Traders.