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S&P 500 futures collapsed. If it doesn’t recover by tomorrow, markets will open down.

The news came in. Greece refused to apply for a bailout plan extension considering it “unacceptable”. This is sending dollar higher against Euro and S&P 500 futures just collapsed from last Friday’s new all-time high:

SPX futures

Although there is still plenty of time for the futures to recover (until tomorrow morning when the US markets open) this indicates that the US market would open low.

If the downtrend continues, we may see a failed breakout confirmation (as I wrote yesterday, on Friday, we saw a breakout thru the last resistance at 2093 level). Failing to confirm the breakout would mean that the market would return back down below the resistance level and most likely continued on the downward move.

If that happens we may see it falling back down to 2000 level (not in one day, but in a week or two).

All indicators I use however point to bullish trend, so this collapse in futures may be temporary. Even if the markets open down on Tuesday, it may recover by the end of the day.

Let’s wait for tomorrow and see what SPX wants to do. Based on that we will open a new trade against SPX. If the market shows indecisiveness, we will skip the trade until we know the direction or until the next week.

Happy trading and investing!

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