SP Futures Hourly Chart Updated at Noon

Here are three views of the SP 500 Futures on an hourly basis.

Notice that in the 'big picture' there is still an inverse head and shoulders bottom that is an active formation.

The question is whether this downturn is a natural fallback from the obvious tape painting exercise that occurred for the end of quarter, or a trend change that will challenge the inverse bottom.

Time will tell. But since the real economy continues to deteriorate, albeit at a less shocking rate of decline, we doubt this very much unless the government begins to encourage monetary inflation with abandon.

So, our bias is to the downside but keep an open mind. We would expect a fresh decline to test the prior near term bottom at the very least, with an eye to the lows if that gives way.

One might conclude that the rally we have seen is just a 'back-kiss' to the bottom of the longer term uptrend channel which, if it fails, brings a very bearish cast to the charts indeed.

We have to add, in editorial fashion, that the Obama administration is a complete failure when it comes to putting the economy in order. This is because of the embedded thinking from Summers and Geithner and their backers at the big five money center banks.

There will be no recovery until the banks are restrained, made into banks once again, and speculation is wrung out of system to be replaced by productive efforts and the creation of real wealth.

We prefer to attribute bad results to incompetence rather than inappropriate motives, but we're keeping an open mind with regard to these jokers.