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."

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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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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