The S&P futures posted solid gains yesterday after the government unleashed details of its housing rescue plan and Obama called stocks a good buy. However, investors had little to cheer about data-wise with the ADP Non-Farm Employment change number coming in much lower than expected. Although the ISM Non-Manufacturing PMI was slightly better than expectated, the number was below that of the previous release and still signals economic contraction. Hence, the rally in the S&P futures faded, and the U. S. markets are looking to open lower Thursday morning.

Investors are waiting on monetary actions from both the ECB and BOE today with both central banks expected to lower their benchmark rates further. If either should lower interest rates more than expected or use extremely negative language in their policy statements, then U. S. equities could react negatively at the prospect of weakening European economies.

The S&P is finding unsubstantial optimism in the positive economic language emitting from the meeting of China's National Congress. Premier Wen Jiabao's speech yesterday noted China's goal of 8% annual GDP growth is attainable despite a weakening global economy. Therefore, U. S. investors aren't biting will need concrete data backing up the optimism.

Japan's Capital Spending decreased at an even lower rate than expected. Therefore, the tailspin of the Japanese economy continues. With capital expenditure on the decline, future productivity will wane and Japanese corporations will be in for a world of pain. The U. S. will release more key economic data today including Unemployment Claims, Revised Nonfarm Productivity, and Factory Orders.

If the S&P futures fall below March lows we anticipate another heightened selloff as equities search for a bottom. We maintain our negative stance on the S&P futures with little positive news to back an uptrend. Fundamentally, we find resistances of 701.75, 709.25, 717.25, and 725.5. To the downside, we see support of 696with 2nd tier and bottom-end sitting at 688 and 682, respectively. The S&P futures are currently trading at 696.25.

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