What a day, so far. The e-SPU plunged in pre-open trading from 1206 to 1170.75, and then recovered all the way back to 1199.25, as if nothing happened at all. My intraday work argues that the 28.50 point rally ended at 1199.25, and that at the very least, the index should retrace some of today's gains into the 1190 area, in the upcoming hours. If there is no real pullback, or just a high-level congestion period in the 1200-1194 area for instance, then we will have to regard this morning's low as the low of the June-July corrective period from 1225.25 (6/3) to 1170.75. If that proves to be the case, then a new upleg is in progress, and we will have to get long to participate in the run at the March highs of 1239.25. For right now though, we are short looking for a pullback into the 1190 support area prior to the possible emergence of another potent rally leg.

MJP 07/07/05 2:25 PM ET 1196.50.

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.