Yesterday's new high, followed by a give-back of most of the intraday, set up today's weakness, which has presses the SPX below both its 9-day moving average, and its October-December trendline.  The weakness has inflicted serious technical damage to the near-term chart structure, and should trigger additional selling pressure that drives the index towards a test of more important support at 1250-1249.50, which must contain the sell-off to avert the confirmation of the establishment of a near-term top (the end of the October-December advance, and the beginning of a period of correction).  Unless the SPX can claw its way back above 1260.50 by the close, my work points to 1250-1249.50 next.

MJP 12/07/05

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.