Technical trader Todd Gordon is betting on even more downside for the market after two tough weeks for the S&P 500.
"With the recent volatility, we have in fact broken uptrend support," the founder of TradingAnalysis.com said Monday on CNBC's "Trading Nation." "That is not going to be a constructive thing for the bulls."
Gordon is referring to a chart that shows the S&P 500-tracking ETF SPY has broken below what he sees as "support" at $244.
On a chart of the SPY, Gordon points out that the ETF has been making a series of higher lows starting in April, and connecting those dots shows where the market's support lies. But with the SPY falling as low as $241.83 on Monday, the market has decisively broken below that trend line.
As a result, Gordon believes the SPY could fall back to its April lows of $232.51, which represents the first chronological point on that support line.
In order to cash in on such a move, Gordon is buying the September 241-strike put and selling the September monthly 236-strike put for a total credit of about $1.37, or $137 per options spread.
That $137 is the most he could lose on the trade, but if that SPY closes at or below $236, he will see a profit of $463.
There is one caveat, however. In order to mitigate losses, Gordon will sell out of the trade if the SPY breaks above $244, as that will indicate that his thesis is "invalid."
Since hitting a record high on Aug. 8, the S&P 500 has fallen as much as 3 percent through Monday's low.