Stock index futures were down again after the latest data on weekly initial claims for unemployment insurance jumped 32,000 to a seasonally adjusted 516,000, a seven-year high. The market is closing in on a test of its October lows, at 825 in the December S&P futures.

Lind Plus Senior Market Strategist Jeff Friedman said technical momentum indicators, the Slow Stochastics and Relative Strength Index (RSI), are bearish and signaling more downside. He said if S&P futures can find support at 825, it would mark a double-bottom that may pave the way for better days ahead. However, he said he’s like to see a close over 1066 to regain some confidence. Near-term resistance is at 925, the 20-day moving average, and at 937, the 10-day moving average.

“There’s a lot of doom and gloom out there,” adds Lind Plus Senior Market Strategist Phil Streible. He said it’s important to hedge your portfolio, and one way to do that is with currency options.

The U.S. dollar has been rallying since the summer, and instead of correcting hard as some were expecting, it has seen a sideways type of correction, he said. The dollar is benefiting from the unwinding of other foreign currencies, including the euro and Canadian dollar.

“I think that should form a nice base for a move into the high 80s if not the low 90s in the ICE Dollar Index Futures contract,” said Streible. The Dollar Index represents the dollar’s standing against six global currencies. Canada is a commodity-driven economy, and dependent on large exports. Other countries can’t pay up right now for goods, and it’s hit the nation’s currency, said Streible. He sees the Canadian dollar possibly falling to 77, the euro possibly falling to about 1.10, and the British pound to 1.25 to 1.35. He recommends investors consider buying 2009 puts or put spreads.