"As we've seen the S&P 500 move to the top of the range here since the beginning of the year, fewer and fewer of those boats have been going up with the tide," he said, leaving fewer stocks to do the "heavy-lifting" to get the S&P back to record highs.
Johnson was also concerned about the S&P on Monday briefly dipping below its 200-day moving average of 2064.14, viewed as key support number. The index was able to close above that level. Last time the S&P closed below its 200-day average was on July 9.
Monday's weakness on Wall Street, which marked the first five-day losing streak in more than six months, put the S&P down 2.8 percent from its recent high of 2,128.28 on July 20, and 3 percent away from its all-time closing high of 2,130.82 on May 21.
With just a handful of trading days left in July, Johnson also pointed out that August tends to be one of the three worst months of the year, with total returns over the past two decades averaging a negative 0.7 percent.
"I think all of this adds up to a 5 percent decline [in stocks] that we haven't see in a long time. That's going to scare investors a little more than these headline risks we've seen here," he said. "[But] you'll see an opportunity in August to buy lower."
The headline risks he was referring to were the recent meltdown in Chinese stocks and rout in commodities prices, as well as the prospect for the Federal Reserve to soon increase interest rates for the first time in nine years.
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