The Tell: Why Tuesday’s big stock-market bounce left one chart watcher unconvinced

A beaten down and oversold stock market bounced back sharply Tuesday, producing one of the strongest advances of the year, but one chart watcher isn’t convinced the move means bulls have put the worst behind them.

“The percentage of positive volatility alerts (violent buying) reached almost 7%, well below the 2016 level, but well above the response seen after the February lows of this year,” said Jeff deGraaf, chairman of Renaissance Macro Research, in a note ahead of Wednesday’s opening bell. “That may be an indication of blue‐skies ahead, but we’re dubious.”

The technician said the price action puts the S&P 500’s SPX, -0.03% 50-day moving average in focus as the next resistance level.

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