The rally in the S&P 500 is starting to lose momentum and the index could “attack the downside” toward 981 points in the coming weeks, Chris Locke, MD at Oystertrade.com Management, told CNBC.
“This market is starting to roll over … I would expect that we would continue to see the market lose momentum and eventually attack the downside,” Locke said.
The S&P decline would likely pause at the 50-day moving average level around 981 points, but the index could fall further than that, according to Locke.
“I’m generally looking for a weaker period through September into November. I’m still reading this as a bear market rally,” he added.
Locke thinks that the financial crisis is far from over and will actually get worse from here.
“Next year for me is the worst part of the financial problems … this kind of cycle set-up I haven’t seen in my lifetime. So I’m expecting the financial problems to re-emerge and not to find their peak until we hit the middle of next year,” he said.
- Watch the video above to see where Locke thinks the price of gold is going.
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