The S&P futures are consolidating with the battle heating up between the bulls and the bears. We continue to receive mixed data from the U. S., preventing investors from committing fully to the concept of an economic recovery.

The theme at present is improvement in manufacturing coupled with a collapsing housing market while producer and consumer prices trend downwards. Although analysts predict the true economic recovery will begin with a turnaround in housing, the fact that all of the data coming from the U. S. isn't overwhelmingly negative is a relief.

The EUR/USD is consolidating above our 1st tier uptrend line, holding up relatively well considering the brisk selloff on Wall Street in reaction to disappointing U. S. economic data. The EUR/GBP continues its downturn with the GBP/USD looking to break out of our 2nd tier uptrend line.

Hence, we're witnessing the perpetuation of status quo among the Euro, Pound, and Dollar due to a lack of significant data from both the EU and Britain.

The Euro is still at a disadvantage with the ECB taking a vague monetary stance, and uncertainty hardly ever yields a positive performance in price. Will the ECB cut its benchmark further or initiate unorthodox liquidity processes? Nobody knows at this point.

Gold is finding strength in our 1st tier downtrend line despite U. S. equities trading higher pre-market. The precious metal has given us no reason to alter our negative stance and gold certainly has its hands full with the psychological $900/oz and our 2nd tier downtrend line.

We anticipate gold to gravitate towards its natural negative correlation with U. S. equities during critical moments. Hence, the precious metal is still hinting at another breakout in the S&P futures with the back of the uptrend broken.

However, there is always the possibility of gold jolting back into its uptrend should U. S. equities collapse. On the other hand, the precious metal could head lower with equities should deflation worries escalate.

Crude futures are recovering Wednesday morning after Tuesday's selloff in reaction to disappointing PPI and Retail Sales data. Yesterday's downturn was not significant and crude has risen back above the highly psychological $50/bbl.

The indecisive movements reflect investor uncertainty concerning the economy as a whole. While investors are not willing to give up on the uptrend, the downtrend is still sitting in the driver's seat with investors unwilling to commit above our 2nd tier downtrend line.

The highly psychological $50/bbl area continues to play a lead role as prices are gravitating here. Naturally, the key driving force behind the demand structure of crude is the overall health of the U. S. economy.

The 30 Year T-Bond futures made a nice move to the upside yesterday as U. S. equities headed south in reaction to negative economic data. However, once again, the
30 Year futures failed to make a game-changing move to the upside. The lack of follow through to the upside paints a distorted picture.

On one hand, we could be witnessing insufficient demand in the bond market to compensate for the massive supply of treasuries created to fund the government's stimulus measures despite the Fed's use of quantitative easing.

The S&P futures experienced considerable losses Tuesday after the U. S. released disappointing PPI and Retail Sales data. The futures weakened below April 4 highs and our 3rd tier downtrend line before popping back above the trend line Wednesday morning.

A surprising declining PPI reignites fears of deflation while the negative Retail Sales number reinforces the fact that U. S. consumption is buckling under the pressure of the economic downturn.

Yesterday's data points raise a red flag concerning the possibility of a head fake in economic data and shows the worst of the economic crisis may not be behind us after all.