The S&P 500 continues to climb, with its emini contract hitting 1204.50 mid-day in what increasingly could be a return trip to retest the recent high at 1216.75. My pattern and momentum work are pointing towards such a scenario - another mini panic that propels prices to new highs.

The question is what happens then? My intermediate-term work is warning me that if the e-SPM takes off (in a mini panic-type advance) and rockets into new high ground, let's say into the 1230/40 target zone, then it will be accompanied by a glaring set of failed (intermediate-term) momentum figures, which certainly represent the scariest set of indicators I have seen since May-Aug 2007. So, perhaps the current upleg is a two-edged sword. We are approaching the time to be ultra-selective and ultra-careful on the long side.

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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