The correction in the S&P 500 index does not look like the start of a bearish reversal, technical strategist Katie Stockton told CNBC on Friday.
"It's certainly a loss of momentum. That's undeniable," said Stockton, founder and managing partner at Fairlead Strategies.
The loss of momentum dictates some near-term caution, she said, but the correction does not look like the beginnings of a bear market. A bear market typically is defined as a drop of 20 percent or more from a market's peak.
Stock futures were higher Friday, but the projected increases amount only to a fraction of Thursday's significant losses. The S&P 500 fell into correction territory Thursday, down more than 10 percent from its record reached in January.
"What we now want to look for is signs of downward exhaustion," Stockton told "Squawk Box."
Stockton, a former BTIG strategist, has been paying close attention to the 200-day moving average on the S&P 500, which is around 2,540.
"It's really less than 2 percent at this stage, so not necessarily a lot of downside from here," she said. "But it's definitely a widely watched level from a technicians standpoint."
In a January note to clients, Stockton wrote that she ultimately sees gains for 2018. But she warned of "deeper pullbacks" that will "keep the slope of the uptrend in check this year." She termed the gains as "more modest" than the 19.4 percent advance for the S&P 500 in 2017.
On Friday, she said investors should expect "short-lived" volatility in the market.
Volatility refers to the amount of uncertainty in the size (and direction) of changes in a market and is typically measured by the deviation of returns.