SPY Pivots - Market Analysis for May 31st, 2006

The SPY's pivoted off of yest.'s pullback low at 126.01, and have rocketed to 127.33 so far today, in what looks like the beginning of a new upleg within the larger upside recovery rally that began at last week's low of 124.67. Yest. I had identified 126.60/20 as the likely target zone for the conclusion of the pullback. Today's strength confrms 126.01 as the low of the pullback, and the inaugural point of a new rally leg that should test and hurdle Fri.'s high at 128.43 on the way to 129.50/80. We will look to enter long positions into weakness to the 127.00-126.80 area in the upcoming hour(s). MJP 5/31/06 11:50 AM ET 127.20

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