The cash SPX continues to rally off of yesterday's pullback low at 1257.21, and in fact has climbed “too much” to be consider anything other than the start of a new upleg (rather than a rebound within a larger corrective process).  At this juncture, we are looking for a retest of the December 14 high at 1275.80, which if hurdled should trigger upside acceleration to my next optimal target zone of 1278-81.  Only a sudden downside pivot reversal that presses the SPX beneath yesterday's low at 1257.21 will invalidate my current constructive work.

MJP 12/21/05

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.