Traders are glued to the charts as the S&P 500

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[.SPX  Loading...      ()   ]tests the crucial January low. Is it time to start buying?

John Roque, Senior Technical Analyst and Managing Director of Natixis Bleichroeder joins the panel for this conversation. Following is a synopsis of his main points.

Chart: S&P 500 2 year

Analysis: The charts suggest that the S&P will go lower, explains Roque. I expect well break lower than 1270 Friday or Monday.

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Chart: Commodities Index vs. S&P 500, 1956-2008, with 3-year moving average. 

Analysis: Conventional wisdom suggests that commodities are in a "bubble" right now, says Roque, but I don’t think that’s the case. It looks to me as if the commodities surge is in its infancy. The commodities-outperforming-stocks relationship is far below its long-term average. In fact, it hasn't been at the average for more than 20 years.

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Chart: AMEX Pharmaceutical Index, 1995-2008, with 40-week moving average. 

Editorial: While the stocks that make up this index might be considered "growth," "safe," or "cheap," the index continues to look weak on a technical basis, says Roque. I’m bearish.

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Chart: Energy as a Percentage of the S&P 500, 1977-2008.

Analysis: Investors should emphasize energy in their portfolios, counsels Roque. We've been making this case for 4 years now. I think energy will eventually be worth more than the financial sector in the S&P 500.

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The bottom line: The S&P could break down to 1236. Also look to buy commodities on any pull back, counsels Roque.

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Trader disclosure: On Mar. 6, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (INTC), (YHOO); Najarian Owns (AAPL), (BIIB), (C), (CSCO), (MS), (NOK), (MSFT); Najarian Owns (USB) Puts; Najarian Owns (YHOO) And (YHOO) Calls,  (COP) Calls,  (IDCC) Calls; Finerman Owns (GS); Finerman's Firm Owns (AAPL), (AEO), (FNM), (GE), (DSW), (MSFT), (PLCE), (SKS), (VCLK), (WMT), (YHOO), (RAI); Finerman's Firm Is Short (IJR), (IYR), (IWM), (MDY), (SPY); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; GE Is The Parent Company Of CNBC; Charles Schwab Is A Sponsor Of "Fast Money"

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