Chartology - What's Next For Stocks?

For the week, the Dow rose 6.8 percent, the S&P 500 gained 6.2 percent and the Nasdaq rose 6 percent.

That looks pretty impressive until you remember that the S&P 500 is still down nearly 10 percent on the year and has shed 47.9 percent since hitting its all-time high in October 2007.

With numbers like these it’s no wonder that investors are at odds over what’s next for stocks. For insights we turned to Oppenheimer's chief technical strategist Carter Worth.

S&P 500

S&P 500

When analyzing patterns in this chart of the S&P Worth says, “I have no more regard for the last 10 days of strength than I do for the 10 days of weakness that preceded it.” In other words, they net each other out.

On average we’ve been chugging along around 800 (plus or minus) in the S&P -- and patterns in the charts suggest to Worth that's where we'll stay.

But for how long?

Patterns suggest to worth that the market will mimic what happened in 2002 - 2003 when it stayed at the lows for 7 or 8 months "and we've only been here for 5," he says. "The presumption is we're going to be stuck here for another 8-10 weeks!"

What’s the bottom line?

Although there are people who are calling for another big down leg Worth doesn’t see that happening. “There are straws in the wind that are constructive.”

Looking for a trade. Worth sees one in consumer discretionary.


Worth tells us consumer discretionary is typically among the 3 leading sectors when the market turns because "were such a consumer driven economy".

And he thinks it's not too soon to take a long position in sector laggards such as Wendy’s or Burger King. "Both have lagged the group but appear to be in early stages of turning a corner,” he says.

To see Carter Worth's complete analysis please watch the video.

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Trader disclosure: On Mar. 27th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (AAPL), (POT), (WMT), (SDS), (GE), (GS); Macke Is Short (BRK.B); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (FXI), (EEM), (TTM), (RIO), (TSO), (WFC); Finerman's Firm Is Short (IJR), (MDY), (SPY), (USO), (IWM); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (MSFT); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Is Short (BPO) with wires