The S&P 500 is managing to cling on to critical levels around 870 points and could remain firm until August, but after that stocks look set to sink, Chris Locke, MD of Oystertrade.com Management, told CNBC Wednesday.
“The S&P has actually held this level very well, we just nudged under the 870 level for a day and then it bounced back up and we’re now moving back above the 50-day exponential averages,” Locke said.
“This sort of general sideways trend and the market holding up could last into August,” he added.
The stock market generally is staving off declines and holding in a broad consolidation range that’s been in place since the highs seen on June 11, Locke said.
If the S&P manages to stay firm it could even push higher in the short term, according to Locke. But the picture will turn bleaker in August, he added.
“I still look for the period August into October as a weaker period,” Locke said.
The 870-to-875 point range remains a very critical area and if the S&P breaks below that, then it’s in for a further correction, according to Locke.
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