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Until this happens, keep buying stocks: Technician

It's the investment equivalent of Pavlov's dog. The S&P 500 falls back to its 200-day moving average, and investors jump over themselves to buy stocks.

In fact, since 2011, each time the S&P 500 touched the 200-moving average, a strong rally soon ensued. But now, some traders are worried things might be different.

"I don't see a lot of upside [in stocks]," David Seaburg of Cowen and Co. said Monday's "Trading Nation." "I think we are actually in a fairly valued market right now."

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According to Seaburg, the market just doesn't have the momentum it needs to get out of its current rut. "Sixty-five percent of the New York Stock Exchange stocks are trading below the 200-day moving average," he added. "The leadership in this market has been very small right now."

Seaburg pointed to blowout earnings from Amazon and Google, which sent both stocks soaring, as positives, but he also suggested that those types of stories are too infrequent to see a massive move up in the overall market. As of Monday, 191 S&P 500 firms reported earnings, with 74 percent of that coming in above estimates, per Thomson Reuters.

For Seaburg, the next major mover in the market will be the Fed rate hike, but until then, he believes the market will remain in its current state of malaise. "I don't see any movement to the upside or the downside."

But from a technical standpoint, things might be looking a little better.

"We've tested this moving average about six times since the low in 2011," technical analyst Todd Gordon said Monday on CNBC's "Power Lunch." Gordon pointed out that each time the S&P 500 has touched or breached that key moving average, it has resulted in more upside. "I don't think [Monday's move] is that significant."

To Gordon, the most important feature on the chart is the uptrend channel. "Until we break through that, I don't think we're in trouble here at all," added Gordon, founder of TradingAnalysis.com. The S&P 500 is currently trading at the lower end of its range, and Gordon expects to see a bounce in the near future.

Until that trend channel breaks, Gordon says you can still buy. "I think this is just a little reset before we see the next leg higher."

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