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An unusual scenario is creating a summer of pain, market analyst warns 

Veteran market analyst pushes play that could withstand a summer of pain

Investors may want to hold on tight.

Todd Salamone of Schaeffer's Investment Research suggests the stock market's wild ride will intensify this summer and could take the major indexes down with it.

The firm's senior vice president of research cites an unusual scenario that materialized around the June Federal Reserve rate hike that bodes poorly for stocks.

"The interesting thing about this particular rate hike was we measure short-term sentiment. It was very optimistic right ahead of this rate hike, which didn’t make any sense," Salamone said Wednesday on CNBC's "Trading Nation." "It was a paradox because that’s the worst time to be in stocks in the short term."

His thoughts came as the moved back into the red — closing below its 50- and 100-day moving averages. Plus, the Dow is on the verge of posting its second negative quarter in a row for the first time since 2015.

Even though Salamone is cautious on the broader markets, he's positive on retail stocks.

"The sector I do like and would rotate into is the retailers. Those stocks were left for dead — especially some of those department stores," he said. "They’ve come out with earnings this year which have beaten expectations."

The SPDR S&P Retail ETF has struggled — down 3 percent over the past three years. But, it has been regaining footing. The group has rallied 22 percent in the past year, and Salamone contends there's still money to be made.

"There are still a lot of hold and sell ratings relative to the buy ratings," Salamone said. "There’s still a lot of short interest. That short interest, by the way, is in the early innings of being unwound."

Summer meltdown coming for stocks?