At 1:00 p.m E.T., the e-SPZ appears to have just finished a recovery pop from 1192.50 to 1200.75, which may have caught some folks' attention because the partial holiday trade is relatively subdued.  But from a strict technical perspective, this means very little to the chart pattern that has developed off of last Thursday's low at 1185.75. Let's notice that the micro pattern shows a series of lower-rally highs at 1207.00, 1204.75 and 1204.50, which is keeping the overall downtrend intact from one week ago (1238.75). To break the back of the downtrend, the e-SPZ must hurdle and sustain 1204.50/75. Otherwise, the lower-pullback lows since mid-session Friday at 1195 and 1192.50 likely will be violated again, on the way to a retest of Thursday low at 1185.75.

MJP 10/11/05

Mike Paulenoff is a 25-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his E-mini S&P and QQQQ technical analysis and trading alerts. For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary, or try his QQQ Trading Diary.