The vast majority of my technical work points still higher in the S&P 500 Depository Receipts (SPY) before the recovery upleg runs its initial course on the upside. At this juncture, my pattern work indicates that prices are carving out a high level, near-term bullish consolidation area that should resolve itself to the upside either into, or in reaction to, tomorrow's FOMC decision. The optimal next target zone is 137.50-138, which will satisfy a test of the multi-month support plateau that was violated in mid-January. Of course, who knows how many, and the magnitude of the whipsaws in the aftermath of tomorrow's FOMC meeting? Nonetheless, all else being equal, a run at 137.50-138.00 is in the cards technically prior to the completion of the recovery upleg off of the January 22 low at 126.00.



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.