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Trend bullish - Pullback looks complete and rapid ascent has nearly recaptured 50% of entire pullback from mid-June.  An upcoming test and breakout of June highs likely

Tuesday’s rally back to multi-day highs looked important and positive in having halted the recent decline in its tracks.  Following five days lower out of the past six, SPX managed to rally sharply enough to recoup nearly 50% of the entire pullback since mid-June highs.

Six Equal-weighted Sector ETF’s rallied over 1% on the day: Materials, Industrials, Consumer Discretionary, Real Estate, Technology, and Communication Services.  Of those, Discretionary and Technology rose over 2% on the session.

As discussed in recent days, the lack of severe downside breadth on recent weakness was thought to be encouraging, and a few days of large-cap Technology weakness largely camouflaged market performance, as many sectors performed quite well throughout last week.

Going forward, I view Tuesday’s strong gains as having been constructive, and should lift SPX back to test and exceed mid-June highs which could help prices surpass SPX-4500.

Until proper evidence of real exuberance combined with defensive strength starts to crop up in th...

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