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The S&P did something it hasn’t since 2008 — and it could be a bad sign for stocks

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The S&P 500 just experienced two "inside weeks" in a row for the first time since February 2008, an indication that the market may be in for a major breakdown or breakout in the weeks ahead.

An "inside week" is a technical term meaning that the market's high in a given week is lower than its high in the prior week, while its low that week is higher than its low in the prior week. In other words, during an inside week, the market does not trade at a single level at which it did not also trade in the week before.

Inside weeks are unusual, but two inside weeks in a row is rare indeed. The last time the market created such a Russian-doll-like trading pattern was in February 2008; the two prior occurrences were in June 2007 and January 2000, according to Ryan Detrick, a technical analyst with LPL Financial. 

"Inside weeks happening several weeks in a row is almost unheard of," Miller Tabak equity strategist Matt Maley commented Monday on CNBC's "Trading Nation," calling it a sign that investors "don't know what's going to happen next — they don't know what to do with their money."

Looking forward, Maley points out that inside weeks "tend to show that the existing trend is weakening." And since the trend has taken the market higher, "this could be a sign of a top that is coming in the not-too-distant future."

With stocks trading in a relatively tight range, "I think it would be a good time to take a few chips off the table and look for a better place to put money to work than here. Because, boy, when you get that kind of sideways move, especially when you get inside weeks — once that's broken out, it leads to a very big move." 

For Eddy Elfenbein, editor of the Crossing Wall Street blog, the inside weeks do little to indicate what the market will do next, but are "really a reflection of the fact that the market hasn't really been surprised by anything since Brexit. And even before Brexit, there hasn't been a big wallop that's hit the market."

Positive earnings numbers, however, "could lead to a breakout and for us to leave this envelope that we've been in," Elfenbein added. 

With the S&P rising above the prior week's high on Monday, three consecutive inside weeks are not in order. In fact, such an event has never happened before, according to Maley.