From a BIG picture perspective of the S&P 500 Depository Receipts (AMEX: SPY), my sense is that the price structure is traversing a range between 149-150 on the high side, juxtaposed against 145 to 143.50 on the low side. A climb above 150 should trigger a run at the July high of 155.53, while a break of 143.50 should trigger downside acceleration towards a retest of the August low at 137. Today's weakness has pressed the SPY mid-point of the range. However, my near-term work suggests that in the 146-145 area we should be looking for another turn to the upside for a run at the top of the range (150). For the time being, I am content to "trade the range," unless price action tells me the range is no longer the dominant pattern.



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.