Yesterday, when I wrote about my perceptions of what would create "crash-event" (panic) conditions in the emini S&P 500 (e-SPM) -- a sustained break of 1056, followed by a breach of 1036 -- the e-SPM was trading at 1108. Already today, the e-SPM has pressed beneath my "orthodox low" at 1090.75 from 5/07 to a new reaction low at 1074.50, off of the April high 1216.75 (-11.7ï¿¼%). We can see from the enclosed daily chart that 1074.50 does not represent any particular technical significance (support) other than the fact that if the index did not continue to the downside from there then perhaps a condition of near-term bearish exhaustion has set in.

That said, the e-SPM must climb above 1094 to trigger signals that "something ended" at this AM's low of 1074.50 -- or 107.95 if tracking the S&P 500 Depository Receipts (SPY). Inability of the e-SPM to hurdle 1094 followed by a resumption of weakness that breaks 1074.50 will point the index towards a full- fledged test of the 5/06 "Flash Crash" low at 1056... and one step closer to "activating" the crash scenario (1056-1036 last cushion zone). MJP 5/20/10 11:20 AM ET (1083.25)

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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