10:37 am EDT:  Despite the strong gap down and negative breadth, the day session is relatively quiet with no extreme NYSE Tick readings.  Barring a surprise news event, we don’t expect a trend day down.  1092.50 to 1093.75 should still provide enough resistance to get a day trade short out of it.  We would peg the max low at at 1082.75 and the max high as 1096.25 to 1097.  A close above 1097 keeps the bulls alive for another day and points to a possible bear trap this morning.  A close below 1090 still presages a test of the 1060 to 1070 area.

9:27 am EDT:  The ES is poised to gap below day-session-only S2, which gives the strong possibility of a trend down day.  If bulls cannot rally from the getgo, they are in trouble.  Yesterday’s overnight and day session lows is now a sell area, from 1092.50 to 1093.75.

The Precise Take – The risk trade is at a critical juncture

Leaders Analysis:  The EuroYen sold off again overnight to make a new 52 week low.  In fact, it passed through the 120 level (on the way up) exactly a year and a day ago.  The US Dollar Index is correspondingly up, but only nominally and has not exceeded last week’s high.  30 Year T-Bond futures are up, with the yield breaking moving average support and approaching long term trendline support, despite yesterday’s poor 5 year auction.  It’s increasingly looking like the US Dollar will break resistance and rally higher.  We will know after tomorrow’s GDP report at 8:30 am.  All in all, the leaders are slightly equities bearish.

Medium Term Analysis:  Overnight, the ES sold off from yesterday’s settlement after having failed intraday yesterday to accept in the green value area below.  Jobless Claims disappointed as we write and the ES is down to critical support.  As we said yesterday, if it closes below 1090, it should test at least 1060 to 1070.  There are a number of economic reports tomorrow, which will provide…

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