Stocks pared their losses after a lower open on Friday. This follows Thursday’s market plunge as stocks logged their biggest drop of the year. What are the key levels investors should watch for going forward? Mark Arbeter, chief technical strategist at Standard & Poor’s, shared his insights.
“We’ve fallen very close to the mini-crash lows near S&P 1,065, so we’re at a critical juncture," Arbeter told CNBC.
"And we’re also close to the February pullback lows, which was around 1,050,” he added. “We’re going to bounce either today or early next week and we need to see some stabilization here before we call the end of this correction.”
Arbeter said there’s been a lot of capitulation developing in the internal market indicators.
“Yesterday, we saw extremely high levels of total put-call ratios—the equity put-call ratio was the highest since January 2009—very close to the bear market low,” he explained.
“The advances on the NYSE were less than 200 and decliners were over 3,000 and that’s about the worst that we’ve seen from an internal perspective since the fall of 2008—so we’ve seen signs of capitulation here and we just need to see some upside.”
However, Arbeter said if the S&P dips below 1,050, then there is a chance of a 100-point downside on the S&P.
“That would represent a 50 percent retracement of the total bull market,” he said.
- Watch Arbeter's Previous Appearance on CNBC (May 5, 2010)
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No immediate information was available for Arbeter or his firm.
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