The vast majority of my technical work points still higher in the S&P 500 Depository Receipts (AMEX: SPY) before the recovery upleg runs its initial course on the upside. At this juncture, my pattern work indicates that prices are carving out a high level, near-term bullish consolidation area that should resolve itself to the upside either into, or in reaction to, tomorrow's FOMC decision.

The optimal next target zone is 137.50-138, which will satisfy a test of the multi-month support plateau that was violated in mid-January. Of course, who knows how many, and the magnitude of the whipsaws in the aftermath of tomorrow's FOMC meeting? Nonetheless, all else being equal, a run at 137.50-138.00 is in the cards technically prior to the completion of the recovery upleg off of the 1/22 low at 126.00.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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