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Jeff Cooper: Tuesday's Key Reversal in the S&P 500 May Indicate Further Downside


If SPY retraces to 195, the index could find itself in a weak position.

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If the S&P 500 trades back below Tuesday's low and sees a follow-through below the 20-day moving average it will be a conspicuous change in character for the market; it would suggest Wednesday was a Pause Day following Tuesday's Key Reversals as offered in this morning's report (subscription required).

Offsetting Tuesday's signal bar, reversals open the road to a potential fast move to the topside. However, as a 10-minute SPDR S&P 500 ETF Trust (NYSEARCA:SPY) chart from the Daily Market Report shows, below a retrace to 195 puts the index in a weak position.

Click to enlarge

Twitter: @JeffCooperLive

This article originally appeared on Jeff Cooper's Daily Market Report. To get Jeff's commentary plus day and swing trading ideas each day, take a FREE 14-day trial to Jeff Cooper's Daily Market Report.
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No positions in stocks mentioned.

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