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.

The U. S. has more key economic releases on tap for today, including CPI, TIC Long-Term Purchases, Industrial Production, the Empire State Manufacturing Index, and weekly Crude Oil Inventories. Therefore, we anticipate volatility to heat up during today's session.

Though Intel's earnings after the bell beat analyst expectations, the lack of guidance from the semiconductor bell-weather raises another red flag and heightens investor uncertainty.

If major corporations are unable to project performance over the next quarter, it becomes increasingly difficult for chief operators to design budgets to maximize earnings from desirable loan structures. With the barrage of red flags investor uncertainty is rising concerning the viability of a economic turnaround.

However, we caution against become overly-pessimistic right now since the S&P futures are still healthy fundamentally. Investors may wait until the results from the government's stress tests of financials before passing judgment trend-wise.

That being said, the obstacles are stacking up against the uptrend. Not only do the futures still need to pass through February highs, but April highs now serve as an intermediate barrier to the upside. However, the highly psychological 800 level defends the S&P futures to the downside.

Fundamentally, we maintain our supports of 834.75, 829.5, 825, and 818.5 with fresh bottom-end of 812.75. To the topside, our 839.75 support turns resistance while we hold our resistances of 845.25, 850.5, 856.25, and 862.5. The S&P futures are currently trading at 835.25.

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