Louise Yamada has a message for investors: sell now.
On CNBC's "Futures Now" Tuesday, the veteran technician called this week's rally leading into the Federal Reserve's big announcement nothing but a mirage, and she warned against the disturbing price action "beneath the surface" of the broader market.
All major U.S. indexes jumped Tuesday, with the S&P 500 seeing its first two-day winning streak since early November in anticipation of what could be the first interest rate hike in nearly a decade. The move higher comes at a time of whipsaw action for stocks, with the S&P 500 coming off its worst week since mid-August.
"I think [the volatility] will certainly continue," said Yamada. "With all of these rallies you still have only 25 percent of NYSE stocks in the New York Stock Exchange above their 200-day moving average," she said. "It's worthy of being extremely cautious."
According to Yamada, investors must ask themselves four key questions when looking at this market: Does the advance have something to reverse? Has the uptrend been violated? Has support been violated? And, has a downtrend initiated?
"With every answer that comes out yes we would suggest people take money off the table," said the founder of Yamada Technical Research Advisors. Yamada added that with the market now in a downtrend, "one should be out of the market."