The S&P 500 has thus far held the line at a critical support to a true reversal, but the threats haven’t abated. The index retraced most of its recent advance on Tuesday but remains 179 points below the September 2^nd high of 4,545.85 (from 239.9 points yesterday). The next support level is around 4,300 and resistance at 4,400.

Utilities is the best performing sector after posting 14-days rout, the index’s longest drop ever. The sector, particularly vulnerable to interest rate changes, is joining the broader market rebound.

The August Pending Home sales saw a huge upside to 8.1% m/m vs. +1.4% consensus and 2% drop in July.

The report saw strength across all regions:

• Northeast +4.6%
• Midwest +10.4%
• South +8.6%
• West +7.2%

Interesting comments caught our attention from the Chief Economist at NAR, pointing to conditions improving with buyers returning and supply increasing. Affordability is still a challenge. “Rising inventory and moderating price conditions are bringing buyers back to the market,” said Lawrence Yun, NAR’s chief economist. “Affordability, however, remains challenging as home price gains are roughly three times wage growth.”

The market is testing the resolve of lawmakers to do the right thing. Despite the near-term concerns, today’s move appears to be solid.