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Charts Suggest S&P Revisits Flat on Year: Top Analyst

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.”

* You can find our conversation with Chris Verrone about 2 minutes into this video clip.


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Trader disclosure: On May 23, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long GLD CALL SPREADS; Jon Najarian is long FIO CALL SPREADS; Jon Najarian is long FCX CALL SPREADS; Jon Najarian is long AET CALL SPREADS; Jon Najarian is long IDIX CALL SPREADS; Jon Najarian is long TBIX CALL SPREADS; Jon Najarian is long ALR CALL SPREADS; Jon Najarian is long OI CALL SPREADS; Jon Najarian is long FB; Jon Najarian is long GLUU; Jon Najarian is long DDMG; Jon Najarian is long CIGX; Jon Najarian is long CME; Jon Najarian is long CBOE; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long SBUX; Joe Terranova is long SJM; Joe Terranova is long UPL; Joe Terranova is long AAPL; Joe Terranova is long CNX; Joe Terranova is long LQD; Tim Seymour is long BAC; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Brian Kelly is long AAPL; Brian Kelly is long WFC; Brian Kelly is long GLD; Brian Kelly is long XLU; Brian Kelly is long INTC; Brian Kelly is long PEP; Brian Kelly is long HNZ; Brian Kelly is long MSFT; Brian Kelly is short EUROTOXX; Brian Kelly is short CAC40


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