The plot thickens for the rally off of Tuesday morning's low at 1003 on the near-term point and figure chart, as the emini S&P 500 makes another marginal new high at 1071. That's the lower portion of my preferred next target zone of 1070-75, but no real selling pressure has emerged just yet that has approached the trigger of a near-term sell signal.

To do that, the e-SPU will have to print at 1063.00, breaking the prior upside pivot at 1064.00 from late yesterday, which should initiate a press towards 1055-54 thereafter. That said, as we speak, the index still remains perched right near its rally peak. The question is whether or not it is at or near exhaustion (near term). My pattern and momentum work are telling me that in the absence of upside continuation in the upcoming two hours, decisions will have to be made ahead of the weekend whether or not to reduce exposure on Friday afternoon, after a 7% three-day thrust.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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