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SPX Update: Looking a Step Beyond Global Uncertainty


The psychology of uncertainty is a key driver within the stock market.

It's worth noting that the rally has recovered 50% of the two-month-long decline from 1474 in only five sessions, so I'm giving a slight edge to the bulls here for intermediate-term odds. However, as mentioned, neither the bull nor bear intermediate case can be made with fervor yet -- so the chart below details both options, and notes the key invalidation levels. Sustained trade beneath 1365 would favor a retest or besting of the 1343 swing low, and a break of that swing low would almost certainly be huge trouble for bulls.

Click to enlarge

Below is a bit more detail on the bull case. The decline counts very well as two three-wave corrections lower.

Click to enlarge
No positions in stocks mentioned.
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