This Correction Level Signals a ‘Buy’ for S&P: Pro
Stocks will signal a buy after a correction of 7 to 10 percent, Robert Pavlik of Banyan Partners said Thursday on CNBC.
Pavlik said his hope was that it would hover around 1,380 and find some support.
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"I think then what you're looking at is a correction in the neighborhood of 7 to 10 percent," he said.
Why 7 percent?
"It's where, mainly over the past two years, people have been stepping in, looking for that 10 percent correction and trying to be a little bit early."
A 7 percent correction in the S&P from its September high would be around 1,360, while a 10 percent correction would put it at around 1,319.
At 1,363, Pavlik said he would reassess the situation, particularly on whether any headway had been made in Washington over the so-called "fiscal cliff," which would trigger automatic federal spending reductions and the expiration of the Bush tax cuts.
"I don't think this market gets any worse than that. Of course, there's that possibility. But I think what we're going to see going into year-end, really into December, is some behind-the-scenes operation really trying to address this 'fiscal cliff.' It's literally in nobody's best interest to allow this 'fiscal cliff' to actually develop and force the United States into recession next year," he said.
Trader disclosure: On Nov. 8, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long SBUX; Stephanie Link is long GE; Stephanie Link is long CAT; Joe Terranova is long VRTS; Joe Terranova is long SBUX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long XOM; Joe Terranova is long CVX; Joe Terranova is long GS; Joe Terranova is long GLW; Stephen Weiss is long QCOM; Stephen Weiss is long BAC; Stephen Weiss is long C ; Stephen Weiss is long JPM; Stephen Weiss is long AIG; Stephen Weiss is short QCOM calls; Joshua Brown is long AAPL.
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