Traders,

Tuesday’s rally was epic and topped a two-day event that saw the major indices rebound between 5.5% and 6.9%. The mood shift was sudden. Just last Friday, the world was ending, after all. But cooler heads are prevailing this morning, with stocks gapping lower. The S&P 500 opened down 1.3%, threatening to upend the rally.

Now we see if buyers are willing to step up and defend their gains or not. Will a higher pivot low form to create the next step of the bottoming process? If not, this will undoubtedly go down in the history books as a massive disappointment.

Let’s review two ways you could be capitalizing on the rally.

① Exit bull trades. If you were floundering on Friday with underwater bullish positions, the two-day rally is giving you a chance to reduce your exposure. That way, if we go back into the abyss, it won’t hurt as bad.

② Enter bear trades. If you think the downtrend continues, this bounce provides lower-risk entries for new bear trades.

Video Of The Day: Queen’s Court – How to Play an Aggressive Trade Before Earnings

On today’s Queen’s Court, coaches Emily and Matt have a discussion on how to play an Aggressive Trade before #earnings.

Chart of the Day: S&P 500 ($SPY) Gaps Lower

In the first 30 minutes of the trading day, we’ve seen a narrow-bodied candle develop after the down gap.

Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

The Coaches Show Replay

If you missed last night’s episode where Coach Gino discussed Anatomy of spreads and understanding On Balance Volume or would like to watch it again, check it out here.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.

Trade Masters 7:00 PM EST

Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.

Trading Justice 496: Two days make a Bottom?

In this episode, we analyze the storyline that is at the center of the investing world to start the week.

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