Sept E-Mini S&P:S&P futures plunged on Tuesday, falling into negative territory on the year (below 2010 Settle of 1253) and closing down a staggering 32.50 points at 1247 on the day. We have seen some short covering/bargain hunting overnight which is typical after such a dramatic move, but we are looking for trade to hit a wall against the 1257-1260 area for clear indication selling will continue today. If trade presses decidedly above 1360 Pivot, we may get a decent short covering rally, but overall rallies will present further shorting opportunities until a close above 1291 is produced. The 200-MA on the continuation chart comes in at 1207 and is the next key multi-day target should this trend continue. For today though, trade below 1246 targets 1239 to 1232, extensions to 1225 possible. The only concern for the Bears is a potential double bottom at 2011 lows at 1247-1246.

Heading into the primary session open we will be looking to sell into the 1257-1260 R1 Pivot Resistance range with Stops above 1262 suggested. Failures here will spark a turn back to 1253 S1 Support (2010 Settlement), then to 1247-1246 S2 Support (2011 Lows). A punch through 1246 clears the way for the next down leg to 1239 S3 to 1232 S4 lower targets. If 1260 is penetrated, selling can still be done comfortably against 1270-1272 R2 with Stops above 1273 suggested.

On the upside, although buying is not favored today, dips holding 1253 S1 Support can be long scalped with Stops below 1252 suggested. Same strategy can be used against 1247-1246 S2 Support if the potential double bottom is confirmed, stopping out below 1245. Otherwise, a flip above 1260 Pivot calls to buy against 1260-1257 with Stops below 1256 suggested while targeting 1270-1272 R2 Resistance. A stable push above 1272 indicated strong momentum is behind the Bulls and targets 1276-1278 R3 and could even reach 1285-1291 R4.

Daily Chart:

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