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Although stocks have powered higher for four-straight sessions, some chart watchers still aren’t convinced the market downdraft is over.

Despite Tuesday’s broad rally in stocks, technicians say relatively weak internal readings and a change in leadership warn that a drop at least 6% from current levels is still likely. A full-fledged correction of declines totaling 10% or more remains possible.

One reason to expect further weakness is that the percentage of NYSE stocks above their 200-day moving average, which many use as a guide to predicting long term trends, fell recently below 60%, said Bank of America Merrill Lynch technical research analyst Stephen Suttmeier. That’s a “blatant difference” from the short and shallow pullbacks investors got used to in 2013, Mr. Suttmeier said, because “that didn’t happen last year at all.”

Past breakdowns below 60% coincided with the much larger market corrections in 2010 and 2011, when the S&P 500 dropped 16% and 19%, and with the 9.9% and 7.7% selloffs in 2012, Mr. Suttmeier said. At the Feb. 3 closing low of 1741.89, the S&P 500 had lost 5.8% from its Jan. 15 record high of 1848.38.

If the breakdown comes I don’t think it will be this week. Rather, it will be next week. Therefore if stocks start to stall towards the end of the week, look for a re-test of the recent lows.

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