After three rough weeks on Wall Street, the stock market could lose another 10 percent from current levels before rocketing higher--at least if technicals are any indicator, a stock market observer told CNBC on Monday.
Last week, the S&P 500 index fell to "some pretty critical levels," including the 200-day moving average and reactionary low of 1,904, Jeffrey Saut, managing director at Raymond James, said on "Squawk Box." But the index was "very oversold on a short term basis." he added.
"It's a logical place to try and rally here. I think it's a bull trap," Saut said. "I think we get a rally attempt here, but I think eventually stocks go lower, but it should be viewed within the context of a secular bull market that has eight to 10 years left in it."
Saut, who began his career on a New York trading desk in 1971, pointed to other tailwinds for the market. Lower gas prices, for example, will likely boost holiday shopping sales, he said.
"The forces forward are too powerful: the energy independence, the manufacturing revival, oodles of creativity in this country and a bunch of capital on the sidelines," he said. "I think we're in a secular bull market that has years left to run."