Stocks battling ‘summer storm’: Trader

Stocks are off to a rough start for August.

The Dow Jones industrial average extended losses Friday morning, and is down for the seventh-straight day. The index is down almost 2 percent this week, and the S&P 500 has fallen more than 1 percent. But one technician said stocks will "weather this late summer storm."

"You want to stay the course in stocks," the analyst, Rich Ross of Evercore ISI, said Thursday on CNBC's "Trading Nation." "I think the next meaningful move in the broader market remains higher."

According to Ross' chart, the SPDR S&P 500 ETF (SPY) is still trading in a range between $204 and $213, as well as staying above the 200-day moving average, which it has held all year. The SPY ETF tracks the S&P 500. Ross said the SPY will reach a support level of about $207 on the moving average, which is based on price points in the last 200 days.

"Perhaps we get a retest of the low end of that range, but you still want to be a buyer," Ross said.

But Chantico Global chief executive Gina Sanchez said the downturn could "snowball" soon.

"It's hard for me to get behind the idea that this market is just going to keep rebounding and rebounding," Sanchez said Thursday. "I'm looking for some of this weakness to probably continue."

She said the market is overvalued and could see a sharp decline when it starts to fall. Sanchez cited concerns about weak sales numbers coming from earnings reports and over-the-top expectations that will have to be revised down.

"The perfect storm really here would be just to see a little bit come off, a little bit at a time. We've been rounding this top all summer long," she said. "We're probably going to come down from here."

Want to be a part of the Trading Nation? If you'd like to call into our live Monday show, email your name, number, and a question to TradingNation@cnbc.com


Trades to Watch

Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

Read more