Stocks slid on Monday with the S&P 500 closing below the psychologically important 800 level. The move lower has many investors wondering if the party’s over – if now we’re headed back to the bear market lows.
Oppenheimer’s Carter Worth remains confident that the market will hold -- trading sideways near 800.
When analyzing patterns in this chart of the S&P Worth says, “I have no more regard for the last 10 days of strength than I do for the 10 days of weakness that preceded it.” In other words, they net each other out.
On average we’ve been chugging along around 800 (plus or minus) in the S&P -- and patterns in the charts suggest to Worth that's where we'll stay.
But for how long?
Patterns suggest to worth that the market will mimic what happened in 2002 - 2003 when it stayed at the lows for 7 or 8 months "and we've only been here for 5," he says. "The presumption is we're going to be stuck here for another 8-10 weeks!"
What’s the trade?
Worth recommends putting 3 stocks on your radar: NVIDIA , Goldcorp and PG&E . He says patterns in these charts suggest they’re carving out bottoms. I expect to see a bearish to bullish reversal, he says.