The S&P 500 is running out of steam and could slump to 870 points if a key support level is broken, Roelof van den Akker, chartist at ING Wholesale Banking, told CNBC.
“This uptrend is running out of steam … the momentum chart is already showing a series of lower peaks and that’s the same situation as in June, July of this year and this was the sign of a modest 8 percent correction in the equity markets,” Akker said.
He expects the S&P to go through a similar correction to the setback seen in June, July.
Investors should expect a test and possibly a break of a key support area around 970 points, according to Akker. If the index breaks below that level it could fall sharply toward 870 points, he said.
It is unlikely to continue falling below 870 points, if it reaches there, as it is a “solid” horizontal support level and “would be the maximum downside for this correction,” he said.
The index closed at 1016.40 points on Friday.
- Watch the full Roelof van den Akker interview above.
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