The has traded in a tight range this year, struggling to break to new highs. And as U.S. stocks declined almost 2 percent last week, one technician said it's time to take action and protect against a coming market correction.
"Investors are more eager to sell than to buy, and this has us concerned. We are setting up for a bull market correction," Ari Wald, head of technical analysis at Oppenheimer, said Friday on CNBC's "Trading Nation."
The Dow Jones industrial average fell for the seventh day straight on Friday, closing down 1.8 percent. The S&P fell 1.3 percent last week, but is still up almost 1 percent this year.
According to Wald's chart, the S&P has been trading in a sideways range, while the volume on the New York Stock Exchange has been declining. He said this signals trouble for the stock market, as more investors look to sell.
Wald said he sees the S&P falling another 5 percent to the 1,970 level. To prepare, investors should take several precautions to hedge risk, he said. Wald's suggestions included buying exposure to volatility, adding short positions to long positions and rotating investments into safer sectors such as consumer staples. He also recommended building up cash to invest in bargains after a correction.
Managing director Boris Schlossberg of BK Asset Management said historically, September and October have proved to be strong months for stocks. He said with the exception of 2008, stocks have risen from August into September and October every year in the past 10 years.
"There's no doubt about it that we're seeing some distributive price action in the market. But on the other hand I went back and looked in the last 10 years," he said. "Any kind of correction I think you see here is probably going to be a good opportunity to load up on equities."
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