In A natural place to rest, we highlighted the likelihood for a period of higher volatility that could track the first 7% correction off the March 2009 low, but we didn’t expect it all in a week. In early activity yesterday, the S&P 500 (SPX) pulled back to the breakout point of the trading range (Figure 1), which has caused fear of a more serious decline like the one leading to the March 23 low. We think a replay of the March swoon is unlikely for a variety of reasons.

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