Heading into the final hour of trading for this week, the SPX remains about 8 points off of its marginal new high. As of this moment, other than a glaring negative momemtum divergence (higher-high in price vs. lower-high in momentum), the price action itself is not indicating an imminent end to the uptrend. However, the momentum divergence puts us on notice that the power underlying the upmove from the 10/10/05 low (1168.42) is losing steam. Furthermore, a close below 1297.50 coupled with the momentum divergence will trigger a more emphatic warning that the post-October upmove is in trouble.

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.