Futures Now

The recent rally looks like 2007: Technician

Here's what's wrong with the recent rally: Technician

When it comes to the market this quarter, bad is good.

Some of the S&P 500's worst-performing sectors on the year have emerged as some of the recent winners. Energy, and , which were all down heading into the fourth quarter, are the three best-performing S&P 500 sectors since Oct. 1, up a respective 11, 9.5 and 6.5 percent over that time. And according to one technician, that could mean trouble for the market.

"The obvious theme since the September lows has been this outperformance from the lagging sectors," Jonathan Krinsky told CNBC's "Futures Now" on Tuesday. "Our general sense is that's not healthy for the market going forward."

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Comparing the recent environment to that of October 2011, Krinsky noted one key discrepancy. "The rally coming off the October 2011 bottom was led by the leadership group," said Krinsky, meaning the sectors that were strong heading into the sell-off continued to be rally coming out of it. "Meanwhile, the laggards continued to lag," he added. "So we're seeing a completely different picture coming off the lows [now]."

Instead, Krinsky says the current market looks a lot more like it did just before the financial crisis. "The correction in August 2007—before we made the major top in October 2007—was led very similarly to the current setup, by the laggards," said MKM Partners' chief market technician. "That leadership makeup does concern us a bit."

Adding to Krinsky's market apprehension is the S&P 500's declining 200-day moving average for the first time in four years. "The primary trend in our view is that the slope of the 200-day moving average is now trading down. That gives us a more cautious outlook."

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Of course, Krinsky isn't suggesting a major market meltdown, but he is urging investors to tread carefully in the current marketplace. "Be patient with the S&P 500," he added. "We have a lot of overhead resistance in the 2,040-to-2,060 range, and I don't think that's going to be easily surpassed."

At the very least, Krinsky expects the S&P 500 to retest the 1,900 level in the near future before resuming its advance.