The Dow is doing something it hasn't done since 1933

Stocks are catching spring fever.

The Dow Jones industrial average and S&P 500 officially wiped out their year-to-date losses this week, as the weight of the Fed was lifted from investors' shoulders. If the Dow can hold its gains through the end of the month, it would mark the biggest quarterly comeback since 1933.

But if you're expecting another big move from here, one technician warns you might have to cool your heels.

"I think the problem for the [market] is that it just might not get much better than this," Rich Ross said Thursday on "Power Lunch" in a "Trading Nation" segment. The Dow has rallied 12 percent from its Feb. 11 low.

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On a short-term chart of the Dow, Ross noted that the index has formed a double bottom, which is similar to what was seen during the August and September swoon. This type of pattern describes when a stock falls to a low, rallies and then drops to the same low only to rebound another time.

"We failed miserably back in October," said Ross. "We expect that to happen again."

Furthermore, he noted that a two-year distributive top on the blue chip index shows that the likelihood of resuming a rip-roaring bull market is slim.

"When you zoom out and look at the weekly chart, you are staring at a six-year bull market with a two-year distributive top," said the head of technical analysis at Evercore ISI. "I think this marks the end of a bull market."

Oil has rallied alongside the broader market this week, hitting a 2016 high and crossing above $40 for the first time since December. And if those gains can hold, Erin Gibbs of S&P Capital IQ says stocks might be in the clear.

"If oil can stay above $40 it will really help earnings growth," Gibbs said Thursday in the "Trading Nation" segment. "The earnings growth for the Dow is an expected 33 percent for EPS growth this year," she said. "This is looking very good for the year."


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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 CNBCand 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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