There are many aspects of the enclosed daily SPX chart that could prove interesting, however, for today let's take compare the "mirror images" exhibited by the price pattern between March and October 2004 on one hand, and during the same time period during 2005. Notice that in 2004 (an election year, by the way), the index hit its yearly low in August, after carving-out a 7-month down-channel, established a secondary low in October, and then accelerated above its rising 200-day MA, and key resistance into and after the results of the November election

Now look at 2005: The index hit its yearly high in August after carving out a 5-month up-channel, established secondary and tertiary highs in September and October, and accelerated below its cresting 200-day MA and key support at 1200 into last week's low at 1168.42, possibly on the way to test the bottom of the channel around 1159? If the 2005-2004 inverse symmetry continues to unfold, then we should not be surprise to see the SPX break the channel support line around 1159, and accelerate to the downside beneath the April low at 1136.22 into the 1100 target zone.

MJP 10/19/05

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.