It’s been a bumpy week for the markets. And according to top technical analyst Chris Verrone of Strategas, this is just the beginning.
Looking at the recent upswing, the question, he says, is whether recent gains were simply an oversold bounce or the start of a more meaningful advance.
After looking at patterns in the charts of the S&P, Verrone believes it's the former - an oversold bounce - and says there's more selling to come.
And he says patterns in the charts of the Russell as well as copper confirm the weakness.
“I think the next weeks and months remain challenging. “Stay defensive,” he says. “I don’t think we’re out of the woods just yet.”
Verrone tells us he’s looking for the S&P to re-test flat on year around 1257. However once that happens, he thinks it sets the stage for a late year rally.
But make no mistake, “we’re not there yet.”