Indice S&P 500

SPX Rally Still Countertrend

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Following the rally yesterday, there was lots of excitement and exuberance in the market. Is the correction over? Are we headed back for all-time highs?

Of course, it is possible. But countertrend rallies are by nature fast and furious, shaking out the nervous short-sellers. Until the S&P 500 closes above 4550, this is still a countertrend. If you were long and traded the bounce, begin taking money off the table. If you are looking for a place to open or add to long positions, this is not it. The market will either reject the price level just above and selloff, or you will get a breakout confirmation. The price level is a place to take money off the table if you have made any. Display caution.

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