The S&P 500 has broken below a key head-and-shoulders pattern, which signals the index will be weak until October, but it won’t revisit the lows seen in March, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC.
“From the March low, most Western markets had a big rally … but they lost momentum six weeks ago and in the process made this head and shoulders top pattern. Now they’ve broken the neckline, it is predicting a down move,” Griffiths said while looking at the S&P chart.
“The prediction is we do a half to two-thirds retracement of the March rally, so it gives us a buying zone between 770 and 800 (points) for the S&P,” he said.
The S&P will likely hit a low in October and be weak until then, according to Griffiths. October brings a dip in the stock market 95 percent of the time, Griffiths said.
“It’s a pretty damn good bet that you should buy then,” he added.
- Watch the full Robin Griffiths interview above.
For the Investor: