Now that the S&P e-mini has hit my optimal target zone of 1281-1283, my work is telling me it is time to be careful on the long side and to expect a period of pullback and correction into the 1272-1268 support area (ahead of the next rally). At this point, I do not want to short, but I do want to wait for a healthy pullback to enter the long side of the index.

MJP 01/04/06

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.