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Not a very compelling picture in either direction, right? The one month range (light green lines) shows a differential of roughly 24 points, and as we speak, the e-SPU is trading at 1236/37, which is right in the middle of the range. So why is our preferred position from the short side? Because if the pattern carved-out since mid-July is a topping process, or a top disguised as a sideways range, then the index should stall in and around the 50% to 66% recovery level on any rally within the range-- at which point it should pivot to the downside for a run at the bottom of the range. At this juncture, given the relatively small position, I am taking a very reasonable risk to find out if this pattern is a top or or a continuation. For the time being, we have ourselves a standoff. We will remain short nonetheless. MJP 08/15/05 3:10 PM ET (1236.50)

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