Will the S&P overtake 1700? With so many major stops above that level, a test is almost guaranteed.
Equities are trading well below highs Friday morning, on worries that the planned stimulus coming out of Japan may not meet expectations. Consumer Price data out of Japan beat expectations and showed the biggest jump since 2008, causing the yen to rally more than a point.
We all know that a stronger yen puts pressure on the equities market, as traders look for a risk-off trade. We are seeing a flight to bonds this morning as a safety trade heading into the weekend.
(Read more: At last, inflation in Japan is speeding up)
The S&P traded to a high of 1689 on Thursday night before selling off more than 10 points. The market found resistance at the 1686 to 1687 level, trading to a high of 1686.50. A close above here will be needed to provide bullish momentum into the close. Meanwhile, a fall back and close below 1681 will be discouraging to the bull camp.