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By Mike Paulenoff, www.MPTrader.com
The plot thickens. In this morning's posting we discussed the likelihood of upside follow-through from yesterday's low at 1307.00 in the S&P 500 e-Mini contract, but that the index would have to hurdle and sustain above 1348.50 to trigger upside acceleration towards the op of the Feb-Mar range. As it turned ou, the e-SPH peaked so far at 1345.00 prior to its mid-session AMBAC swoon. More vital, however, is that the pattern carved out from 1307 to 1345 does NOT exhibit particularly bullish form. This is a warning signal that the upmove is countertrend and when complete should resolve itself in another nasty decline. Wait! Before we run out and establish a new short in the S&P 500 Depository Receipts (AMEX: SPY) or long in the S&P 500 UltraShort ETF (AMEX: SDS), let's be aware that the countertrend rally itself looks like it has more room to run, and may hurdle 1348.50 on the way to 1365/70 -- prior to the downside pivot reversal that should be forthcoming. Patience, patience into late Thursday, or even early Friday, after the Employment Report!
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
