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Using SPY, the S&P 500 ETF, as our surrogate for the US market, we see that the decline off of the mid-September highs broke support line (1). The seasonal Thanksgiving rally last week took SPY to the underside of this support line, now represented as resistance at (2).
At the same time this rally took place, the VIX index stands at 15. Since 2010 when the VIX was at 15, was the market closer to key highs or lows?
With SPY testing the underside of resistance for the first time since 2009 and the VIX sitting at 15, the upcoming price action at (2) becomes very important!
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