Traders are looking for a bounce, but…

Stocks are set to bounce, but investors shouldn't expect any great advance in the weeks ahead, according to macro trader Larry McDonald and technical analyst Craig Johnson.

"In the very short term, we're extremely oversold," McDonald, the head of U.S. strategy for Societe Generale's macro group, said Thursday on CNBC's "Power Lunch." "We're going to bounce."

"But then over the next month," he added, "so much damage has been done technically that we'll probably retest these lows within the next 30 days or so."

Read MoreNo, stocks aren't cheap just yet

"We're a little short-term oversold, I'd look for a bounce," Johnson, of Piper Jaffray, agreed. "A lot of fund managers ... came into 2016 fairly flat and this is probably good for them, for an opportunity to jump in on a little more weakness. So look for a relief rally."

After that, however, "we're going to see some further consolidation and retesting," Johnson said.

Technical support for the S&P 500 ultimately comes in "at about 1,880 and 1,820, and then you can start valuing this market on a traditional P/E-type basis to see where you find your ultimate support."

In other words, a bounce may be around the corner — but that doesn't mean stocks are out of the woods just yet.

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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 CNBC and 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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