Remarkably the DIA decline yesterday and today to a low of 108.97 did NOT break the prior pullback low at 108.85, which from a strict technical perspective preserves the series of higher highs and higher lows carved out off the June 14 low at 106.66.  In any case, the upside pivot off of 108.97 occurred right at our optimal support level of 109.00, has the right look of a completed pullback, and has been accompanied by strong underlying momemtum oscillators -- all of which point to a meaningful rally effort that projects to the 110.20 area initially.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.