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SPX and RUT: Still a Dangerous Market

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Bears have continued claiming key support levels.

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Note that the market may be about to enter a fourth wave chop zone (with an outside shot at something more bullish) and trade above 1359 would open up potentials for at least a short-term bottom. From an intermediate perspective, bulls now need to reclaim 1403 (not coincidentally, this is the same level I noted early last week as a bearish sell trigger) to begin regaining control.


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The market is, in fact, oversold by some metrics. Does that mean an oversold rally could begin at any moment? Absolutely. While nobody likes to miss a turn, does the "hope" of an oversold rally actually represent any kind of winning trading strategy? Nope. The bottom line is that bears have broken major support levels and the trend remains down. There are some indications that the market may be ready for a fourth-wave relief rally, but from an intermediate perspective, it continues to be a dangerous market for longs. Trade safe.

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No positions in stocks mentioned.
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