Looking at the hourly SPY chart, normally this picture would argue for a relatively potent rally effort off of what amounted to an equidistant correction from the December 11 high at 152.87 to this morning's low at 143.96. The light blue lines demarcate what are two relatively equal declining legs of a correction, which would have been exactly equidistant at 143.70. The form of the decline and the glaring positive momentum divergence indicate that at the very least the pullback should be complete and that a period of recovery should be forthcoming. A climb to the 147.00/20 resistance plateau is my initial target. A climb above 147.25 should trigger upside continuation too 150.50-151.00.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.