Why These Charts Look Bad for Stocks

It's time to get out of the market — and not buy back in until the S&P 500 index drops 5 to 8 percent.

At least, that's what BTIG Chief Market Strategist Josh Dollinger told CNBC's "Futures Now" Thursday. And the reasons behind the call lie in the technicals indicators.

To Dollinger, the S&P is simply too high. Not only is it far abut its 50-day moving average, but its long-term trend line lies even before that.

Even more damning is the S&P's uncomfortable distance away from its 200-moving average.

What happened the last three times the S&P got this high above its 200-day? Well, just take a look at the chart.

That last down arrow indicates where Dollinger thinks the market will go.

And if these charts don't say enough, Dollinger also notes that he has history on his side. In every year since 1996, the S&P has suffered at least one 5 percent correction by May.

Why, then, should this year be any different?

All that being said, Dollinger does not think the market is due for an all-out, no-holds barred sell of – only a "healthy pull-back."

Once it drops 5 to percent, Dollinger would advise investors to step back in and buy.

— By CNBC's Alex Rosenberg

Watch "Futures Now" Tuesdays & Thursdays 1p ET exclusively on FuturesNow.CNBC.com!

Like us on Facebook! Facebook.com/CNBCFuturesNow

Follow us on Twitter! @CNBCFuturesNow

Contact Futures Now

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.