S&P 500 Morning Analysis 10/19/09

Futures were down about a 1/2% overnight but they have recovered those losses and now the SPY is trading at 109.16, up 0.27 from Friday’s options expiration close. With weakness in the SMH and XLF, we will have to be vigilant about the possibility of a near term correction and the key level of support to hold on a closing basis will be the recent support/prior resistance at 108.00. Longer term trends remain firmly intact so any weakness should be viewed as a pullback until the market gives evidence it may be more serious.