With a sharp decline early Tuesday, the S&P 500 is once again testing the May-June lows. In fact, this test also involves the February low. The 1040 level held in February, late May and early June. Can it handle another assault?

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The heavy slump in Asian equity markets overnight has transmitted into an ugly start for European indices as well, so unsurprisingly the currency markets have reacted by punishing risk-correlated EUR and commodity currencies whilst fleeing to the relative safe havens of the USD, JPY and CHF. The economic calendar between here and Friday is hardly scintillating, and with one eye on the holiday…

For the second time in two weeks, the Gold ETF (GLD) surged above resistance at 122 and then moved back below with a long red candlestick. The overall uptrend in GLD remains in place, but there is considerable resistance in this area. First support is set at last week's lows. Second support is set at the May low.

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