The SPDR Retail ETF (XRT) is one heck of a bullish chart, which includes names like Whole Foods (WFMI), Sears (SHLD), OfficeMax (OMX), HSN (HSNI), Netflix (NFLX), Dress Barn (DBRN), and Family Dollar Stores (FDO). Purely from a pattern perspective, the XRT shows no sign of peaking, and is poised to hurdle Wed.'s high at 42.64. If the price structure moves vertically higher into a new upleg, it COULD make a run at its upper channel resistance lines in the 44.50- 45.50 target zone, or 5% to 7% more upside.

To do this, the XRT will be climbing on "reduced" momentum, which hit its RSI peak on March 15th, when prices hit a high of 40.32. This means that the XRT has already climbed 5.5% on dissipating momentum. While this is developing and growing concern, obviously the price action tells all -- and it remains up and very strong for now. That said, the longer the "divergence" continues, the more likely it is that when the XRT turns down, the decline will be significant, and inflict some serious damage to the Feb.-Apr. uptrend. Of course, for argument sake, if the XRT declines to 39.00-38.00 from 44.50, or say 14%- 15%, The Street will be looking at the weakness as a buying opportunity. In any case, for now, as long as 41.00 support contains any forthcoming weakness, the bulls will remain in directional control.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.