The S&P takes a licking and keeps on ticking.

Equities in the U.S. have all but fully recovered since we heard the news that Cyprus is looking to tax bank deposits. The S&P is currently at 1,546, nearly unchanged, as it was able to close back into the major resistance. Yesterday's recovery was able to reach the next resistance level of 1,552, as investors began to think that what may take place in Cyprus is very unlikely to spread any further.

A close above the 1,544-1,547 area will provide a bullish feel, but a close back above 1,552 will be very bullish heading into the conclusion of the FOMC meeting tomorrow.

The range was defined very well yesterday, with resistance at 1,552 and support at 1,529. A close below 1,527.25 will be negative, but a close on new lows of the week and below 1,529 will be very bearish, and will likely reflect the development of a deeper global issue.

Finally, we are nearing the end of the quarter, and we may have repositioning, which will add another layer of volatility.

The bottom line? This is the time in the game when you should play defense with your portfolio. Consider buying a S&P E-mini June 1,525-strike put for 33.00 points, or $1,650. Each put hedges roughly $70,000 of your portfolio, and will give you 95 days of downside protection.

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