The SPDR S&P 500 ETF Trust (NYSE:SPY) has landed on a support level. This is why the selloff has paused. It may stage a rebound, but if this support level breaks, it could fall even farther.
As you can see on the following chart, the $416 level was support for SPY in early March. The market found a bottom there and a rally followed.
Now SPY has reached this important level once again.
Markets tend to rebound or breakdown when they reach support. It is rare for them to trade sideways for an extended period of time after doing so. This means the market may be on the verge of a big move.
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