Technician Scott Redler spots an ominous trend in the charts.
This week’s stock market’s tumble may signal a much bigger downside lies ahead.
Technician Scott Redler is noticing an ominous trend in the charts that could temporarily pull the S&P 500 Index down by three to five percent.
« We could be at a short-term top, » T3Live.com’s chief strategic officer recently said on » Futures Now . »
Redler argues a late August correction isn’t so unimaginable — especially as concerns about North Korea’s nuclear intentions escalate.
« The 50-day moving average is a key for the intermediate trends. We may have lost some momentum, but at this point we haven’t been below the 50-day pretty much for the entire year. So, so this is a key spot, » he said. « If we end up holding it, we may see a little bit of a bounce. »
Redler said investors should write down the numbers 2381 and 2332 on the S&P 500. If the trend line breaks, it could signal a move higher.
« That would probably be a good spot to put some longer term capital to work, » he said.
Even with Friday’s positive day, the stock market closed lower for the week. The S&P 500 and Nasdaq both fell by about a percent and a half over the past five sessions.
« Historically, it’s August. We should be in a corrective period anyway, » Redler said. « Volatility is great for traders. We haven’t had it in a while. So, we’d love to see it stay. »
