US futures are now trading flattish again after a light advance earlier. There are lingering jitters from China and despite a retreat in bond yields today, it isn’t enough to really spur a push higher in stocks. That might be the tell for equities sentiment in general. However, we could use a technical test later today to confirm that.

The close yesterday saw the S&P 500 finish at its lowest level in five weeks. And now, we’re approaching the first technical test on the way down in the form of the trendline support from the March and late May lows. It’s a somewhat subjective line but in accordance to measuring the uptrend momentum, it might be an important one.

A fall below that would open the doors to potentially retreating back towards the late June low at 4,328 next. Then, we might start to see the 100-day moving average (red line) get called into question as well.

It’s a tough one for stocks at the moment I would say. There tends to be a turn in sentiment and selling when Wall Street comes in and that is regardless of what the bond market might do it would seem. But if bonds are more bid amid safety flows, then there is even more reason for equities to run and hide.

For now though, let’s see what the bond market will have to offer later in the day and if we are set for another turnaround again in US trading.

This article was written by Justin Low at www.forexlive.com.