Three reasons the market has moved 'too far, too fast,' according to one technical analyst

With the S&P 500 back in correction territory on Tuesday, one trader says this could be a sign of trouble to come for the market.

Todd Gordon of TradingAnalysis.com said that while stocks have seen a "nice bounce" off the December lows — the S&P is up 12 percent since the Christmas Eve bottom — "the move has come too far, too fast."

First, Gordon points out a "shelf" that has formed in the S&P 500 with support at around the 2,650 level, which the index has tested a few times. Gordon says this support level has now become resistance for the S&P.

Second is the index's long-term moving average. He notes that the S&P 500 is trading 4 percent below its 200-day moving average, proving that the trend is in fact broken.

Finally, Gordon points out that the 2,650 level is the new resistance, as the S&P has actually retraced half its losses, which he thinks could result in some profit-taking or short money entering the market.

As a result, Gordon wants to buy the March monthly 255-strike put and sell the March monthly 250-strike put in SPY, the S&P 500-tracking ETF, for the cost of $96 per options spread. If SPY were to close below $250 on March 15 expiration, Gordon could make just over $400 on the trade. If SPY were to close above $255, then Gordon would lose the $96 he paid to make the trade.

So far this year, the S&P 500 is up almost 5 percent.

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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.

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