Yesterday's sell-off saw a lack of longer term participation it appeared as volume was just 1.6m contracts in the 30 point range and 3.8bn shares on NYSE. Following the open and fill of the range gap, the rally higher was rejected at prior settlement which was an early warning sign. This was more likely short term liquidation driving the move, particularly once the 2096.00 level previously discussed was broken. This would have given confidence to shorts to push the downside.

The downside looks incomplete after the poor low left yesterday and a test of last Thursday's VPOC and settlement are the next targets, followed by a test of the swing low. The profile left yesterday has many anomalies to revisit so a move back up to the 2095.50 composite HVN and 2096.00-96.75 area is also likely, which could bring in more selling. Acceptance back above there would put major pressure on shorts.

The sell-off in notes and bonds has continued. Interestingly in the spring of 1987 bonds began to drop aggressively from near their highs as a 6 month warning signal to the stock market while it continued skyward prior to the crash. Yields were obviously much higher then but it's likely that if there is going to be a major correction in stocks, bonds will be a leading indicator.

Overnight the range has been 2081.25-2092.50 on slightly increased volume versus settlement at 2084.00. My main expectation for today is for two sided trade within yesterday's value and for a slight push lower.

Resistance Zones: 95.75-97.25, 02.50-05.25, 09.25-11.50, 14.75-16.25, 18.00-19.75

Support Zones: 88.25-89.75, 83.75-82.25, 78.00-79.00, 70.25-72.25, 64.50-67.00, 59.00-60.75