9:00am (EST)

The bears did some technical damage yesterday as near-term support faded following a 1% drop in the major indexes.  The bulls held the second wave of support but the action was bearish and today’s session could be crucial on who has the upper-hand heading into next week’s Uncle Ben speech.

The Dow fell 115 points, or 0.9%, to close at 13,057.  It was the first time the blue-chips faded triple-digits for the month as the low came in at 13,046.  The bulls tried to push 13,200 and once 13,100 failed we penciled-in a test to 13,000.  From here, the bears could push 12,800 while the bulls will attempt to reclaim prior resistance ahead of the weekend.

The S&P got hit for 11 points, or 0.8%, to end at 1,402.  The bears nearly cracked 1,400 as the index bottomed at 1,400.50.  We had a feeling when 1,410 failed at the open 1,400 would come into play which is why we opened two quick put option trades.  If the bulls are unable to hold 1,400 then 1,375 could come quicker than a Prince Harry trip to Vegas. (continued...) 

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