The Q's made another marginal new intraday high at 37.59, and although this represents the fourth consecutive unconfirmed intraday higher-high since Wednesday's high at 37.36, the Q's exhibit little or no selling pressure or profit-taking. In fact, judging from the enclosed daily chart, the Q's are sitting right at the 50% recovery point of the entire decline from the December high at 40.68 to the April low at 34.35. Right now, neither the significance of the 50% recovery resistance plateau nor the multiple intraday upside momentum non-confirmations appear to be of any concern to the holders of long positions. Nonetheless, my work argues against holding long positions "up here," and instead favors holding small short positions into this afternoon's option expiration. A decline below 37.20 remains the key to any forthcoming sustained weakness.

MJP 05/20/05 11:05 AM ET (37.53)

Click here to view the chart (opens in a new window).

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.