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Why we're not out of the woods just yet

Talk about whiplash!

Just as soon as it was below its 200-day moving average, the S&P 500 is now back above it and now back to where it was trading at the start of the summer.

In fact, the S&P 500 was up for the fifth straight trading day on Wednesday and is now just 4 percent away from its record highs.

Is theworst finally over or is more trouble ahead?

Erin Gibbs, equity chief investment officer at S&P Capital IQ Global Markets Intelligence, says the worst is over. "Valuations have come down to more attractive levels," she said. "We're seeing that the U.S. is still looking very solid – not phenomenal, but still very solid."

(Watch: Stocks end sharply lower)

Gibbs, who is responsible for over $13 billion in assets under advisory, finds the S&P 500's price-to-earnings multiple of 16 to be appealing and likes that the index's estimated earnings growth rate for the next 12 months is 9.4 percent.

However, one thing Gibbs sees as potentially throwing a wrench into the S&P 500's comeback is a bad comment from either the European Central Bank chief Mario Draghi or German chancellor Angela Merkel. Bad news from China's economy could also threaten the rally.

"Any of those could send prices further down," Gibbs warns.

The technicals on the S&P 500 also show signs of concern, according to technical strategist Richard Ross, a CNBC contributor.

Ross says v-shaped reversals like the one seen in the S&P 500 this month aren't rare. But the longer-term chart has a technical sign of possible trouble ahead. That's because he sees a potential right shoulder of a bearish "head-and-shoulders" pattern forming. In his view, it's similar to what happened in 2011 during the European financial crisis that took the S&P 500 down to its 150-week moving average.

(Read: Here's why the stock market melted up)

"The problem is potential technical symmetry with 2011 whereby we put in that head and shoulders top," Ross said. "We had a sharp correction – a v-shaped reversal – but ultimately, that final reversal ran out of steam, and we still had another 20 percent down from that right shoulder."

If the S&P 500 doesn't break above its previous record highs and then breaks once more below its 50-week moving average at around 1,891, then Ross sees a potential repeat of 2011 – a drop to the 150-week moving average, currently around 1,620.

"There are no guarantees that you get back down there," Ross said. "But you can see that there's a case to be made very similar to 2011, when we had the crisis in Europe, for a bigger decline. It is a positive in the short term that we have recovered and the fears have eased or a assuaged to a certain degree. But on the same token, we're not out of the woods just yet."

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