Market Insider

Traders spooked after head fake rally, watching Fed speak

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Charts show more selling to come: Pro

A sharp selloff Tuesday after a day-long rally spooked traders and served as a reminder that the volatility is not over.

"Today's action doesn't instill confidence in the bulls," said Scott Redler, partner with T3Live.com. "This will make the bulls more hesitant about stepping in."

Stocks surged in a head fake rally Tuesday, sending the Dow 441 points higher, before gains were wiped out and the market traded sharply lower into the close. The Dow closed down 204 points Tuesday at 15,666, and has now lost 10.5 percent or 1,844 points in just a week.

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