Since last evening's spike new high at 39.25, the Q's have tested and held 38.90 twice, and rallied up to 39.19 before stalling and pulling back a touch to 39.10. What does that tell us? That unless 38.90 breaks, the bulls remain very much in control of market direction, and that the pattern that is emerging during the past several hours represents another high-level, consolidation-rest period ahead of a thrust to the upside towards higher targets near 40.00. Although the overall hourly technical picture argues against a sustained pop to new highs in the next hour or two, inability of the bears to press the Q's below 38.90 increases the likelihood of a last hour short covering rally ahead of eBay's earnings due after tonight's close.

MJP 7/20/05

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.