Stocks have managed to bounce nicely over the last two weeks, after a swift drop in late August. But the worst may not be over for stocks, says Oppenheimer technical analyst Ari Wald, whose examination of market seasonality suggests a cautious outlook.
"Seasonal trends remain very bearish for the next month," Wald said in a Tuesday "Trading Nation" segment. "September as a whole is one of the worst-performing months of the year for the stock market going back to 1950, and when you look into those numbers, September is even worse when the S&P ends August below its 200-day moving average," referring to an indicator that records the average of the prior 200 closing prices.
"When it's in a downtrend, when you have weakness going into September, markets tend to get even weaker," Wald said.
The technician suggests that the , which opened Wednesday at 1,971, has resistance just overhead at 2,000, and could fall below 1,900 within the month.
However, trader Boris Schlossberg of BK Asset Management has a different take on the numbers.
"If you look seasonally past September, it's actually been a very good time to buy into October and November, when the market tends to rally over the last 10 years. So now might be a time to start accumulating into that potential rally," Schlossberg said Tuesday.