Fast Money

Monday - Friday, 5:00 - 6:00 PM ET
Fast Money

Technicals Suggest S&P at Inflection Point

If you’re looking to get a handle on this market, top trader Guy Adami says technicals are not to be ignored.

He believes the S&P’s close on Wednesday at 1341 is very telling. “We’re at the 50% retracement,” he says. “1422 was the recent high in May and 1266 was the June low.”

What does that mean?

“We’re definitely not staying here,” he speculates. Techincals suggest that “if the market can close above 1350 – then it should push up to at least 1366, a level which had been past resistance.”

However Adami isn’t so sure the S&P can power to 1350.  “Yesterday we had an outside down day in the S&P,” he adds. "In other words, yesterday's high in the S&P was higher than the prior day's high and the low was lower and we closed lower."

That’s a bearish sign. "I'm in the camp that there's another shoe to drop," he says.


SEEKING RETURN? Click here for Fast Money's Favorite Dividend Yielders


Trader Josh Brown sees another troubling technical sign. “We’re seeing a pattern of lower highs and lower lows – that’s no good, either.”

And he adds that fundamentals also suggest the path of least resistance in the S&P is lower. “Right now the market is starting to digest Q2 earnings and estimates suggest 7 out of 10 sectors aren’t going to show expansion.” That too is negative.

What do you think? We want to know!

Posted by CNBC's Lee Brodie

Got something to to say? Send us an e-mail at and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our Web site send those e-mails to .

Trader disclosure: On July 11, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long XLF; Josh Brown is long WMT; Josh Brown is long TGT; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long MSFT; Guy Adami is long BTU; Brian Kelly is long EURO; Brian Kelly is long TIP; 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 short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY

For John Ehrhardt
Nothing to disclose

For Jeff Kilburg
Jeff Kilburg is long SPXU
Jeff Kilburg is long TBT

For Mike Greene
In the past 12 months, Benchmark or its affiliates have receive compensation for investment banking services from the subject Company: SWHC
In the past 12 months, Benchmark or its affiliates have managed orco-managed a public offering of securities for the subject company: SWHC
The research analyst, a member of the research analyst’s household, any associate of the research analyst, or any individual directly involved in the preparation of this report has a long position in the shares or derivatives of the subject company: SWHC
A member of the research analyst’s household serves as an officer, director or advisory board member of the subject company: SWHC
Benchmark makes a market in the securities of the subject company: SWHC and wires