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Technician Sees Stocks Taking a Breather — Not Correction

Global fear trade aside, U.S. stocks could be ready for a three- to six-week pause after a 27 percent run in the past six months, according to Oppenheimer Asset Management's chief technician Carter Worth.

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"We're guessing the market does indeed pause here. That it's 3-5 weeks of resting/consolidating type action. And that the range of said sideways actions is roughly 1315/1360.. or 3 percent +/-," he wrote in a weekend note.

Worth said he disagrees with those who see a major correction coming, even as oil ticks higher.

Ryan Detrick, senior technical analyst at Schaeffer's Investment Research, also doesn't see a big correction. He sees the bottom at S&P 1300, the peak in late January.

"It's an area we think is bottom in a mini potential pullback," he said.

Worth, in his weekend note, points to last Friday as a possible end date for a market run that has taken the S&P 500 up 27 percent since Sept. 1. The S&P finished at 1343 that day. He said it is possible the market could see a price correction, but he thinks it's more likely to trade sideways and consolidate gains over time.

In an interview, he commented on the recent decline in Cisco and today's drop in Wal-Mart .

"Big names and the market doesn't care. There's an underlying bid for equities. There's no place else to go," he said of the U.S. stock market.

The fact that stocks pulled back in November has set the market up to be healthier and it's less likely to sell off in a big way, as a result. Looking at a chart of the S&P, he said you can see why the time is now for a time out from the move higher.

"The angle seems a bit much. It's analogous to, in many ways, the August-November advance, which was the set up for the November dip. It's very analogous in many ways to the February-April advance, when we had the flash crash," he said. "You could see with your eyes it gets weird looking...At some point, an angle down or up has to have mean reversion."

Worth expects stocks to regain momentum after the pause and finish the year at 1400.

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