My near-term pattern and momentum work has convinced me that the SPY either made a significant low this morning at 91.25 within the coil pattern or "needs" to loop down one more time into the area of the October support line near 90.00, prior to embarking on another potent upleg that should climb to 96 and possibly 98 to 99 in the upcoming hours. Only a sustained break beneath 89.50 will argue that the SPY's are en route to retest the 10/16 low at 86.54, which must contain the weakness to avert the invalidation of the coil pattern and a much more intense decline to new lows.



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.