If the market doesn't start to hustle now, the S&P and Dow are likely to fall from here onwards, and we could see a new bear-market low, Chris Locke, MD of Oystertrade.com Management said Wednesday.
"I cannot be encouraged from here on for buying this market," Locke said of the S&P 500 index. "Seasonally and cyclically, the market should head lower once we enter the period of August."
"If we can't really start to make it above 956 now, I would suspect that time would be running out and we will head back lower," he said, adding it would likely go below 900. The trend suggests that we could see a new bear-market low, Locke said.
"If we can get above 956, we can see perhaps that extra run through to 965/970, or even the 1030/1050 level," he told CNBC but warned this was unlikely as "time is running out".
If the Dow Jones Industrial Average moves behind the 8,900 level, that suggests a failing to me, and that the index will head toward the low 8,800 level, Locke said.
The U.S. banking index enjoyed a 146 percent upswing from the March lows, but since then it "really lost its speed, and we're well under the averages," Locke said.
"The banking index had already seen its highs back in May," he said. "If really we can't start to push ahead very quickly from here, and I doubt that we can, we'll start to curl over and move back towards the lower end we saw at the beginning of the year."
The euro/yen is running out of steam at the 133/135 level, Locke told CNBC. If the stock markets go lower, the euro/yen will have "much difficulty" getting any higher than its current levels, he added.
He sees the cross testing 131/130 "very soon," and possibly testing the 115/120 level before yearend.
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