The S&P is within 1.7% from its first key support level...and two of the three most important leadership groups are even closer to their own support levels. Today's "services" data will be important, but all eyes will be on tomorrow's employment report. If those numbers are disappointing, it is all but certain that these critical support levels will be tested.
Sometimes important technical levels are broken in the opposite direction of the underlying fundamentals. This can lead to "tradable" moves in the market place that don't make sense to those whose investment decisions are based solely on what the text books tells them "should" happen. Sometimes those technical moves are a harbinger for a change in the fundamental outlook...and sometimes it's merely something that lasts for a few weeks and works-off a technical condition or some extreme "positioning" issues.
However, when new fundamental developments CAUSE a break of important technical support/resistance levels, the move is usually a VERY strong one (in the direction of the "break"). With this in mind the next few days should be quite important as to how the markets act throughout the entire 4th quarter.
For more on this issue and to see the levels I'm watching,click here to subscribe to The Maley Report and see what some of the most successful institutional investors read every day.