Based on the intraday pattern, the S&P 500 Depository Receipts (SPY) looks like it ended the recovery rally off of Friday's low (152.84) at this afternoon's high of 154.72 and has turned down. The extent and form of this pullback should reveal to us if the SPY started a new upleg at Friday's low or merely ended the first part of a larger corrective process. If the former scenario unfolds, then the SPY should hold in the vicinity of 153.50. If the second, then we should expect a test and likely violation of Friday's low at 152.84, on the way to 152.00, if not lower.



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.