Given the strength of the rally off the October lows and the magnitude of the losses over the last two days, it would not be surprising to see the S&P 500 attempt a move back toward 1,250. Any positive news from Europe or the Fed could attract buyers. If stocks do rally, the strength of the move will be very telling.
As the three charts that follow show, from a downside perspective a break of 1,209 and 1,204 would increase the odds of a more significant drop.
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