When markets are rallying, the bulls are in charge. When they’re selling off, it’s the bears who are in control. The breaking or crossing of an uptrend line is the first sign that the bears are about to take over or at least become equal in force with the bulls.
Over the past 10 months, the SPDR S&P 500 ETF Trust (NYSE:SPY) has been in a well-defined uptrend. It has tested or traded close to the uptrend line on eight separate occasions. Each time, the SPY bounced off of it and the rally continued.
Now the SPY is trading at this uptrend line once again. If SPY breaks it, meaning it crosses it on the chart, it could illustrate that the bears are taking control and may signal an end to the rally.
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