A sudden, sharp retracement lower by the S&P 500 after probing beyond its 200-day MA would not at all be surprising. However, a convincing move above the June high would cause the S&P to reverse to an intermediate-term uptrend.
There are those who believe we have a recovery, though weak, that will continue and eventually bring the economy back to health. Then, there are those who think the recovery will not come as planned.
In raging bull markets, buying breakouts above bases of consolidation can be a very profitable strategy. But in less convincing markets, such as the one we're in now, a lower risk strategy for buy entry may be to wait for strong ETFs to subsequently pull back to near-term support levels.
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