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Don’t Get Too Comfortable with Wednesday's Bounce

Are you a bull who’s holding your breath, hoping that the selling will abate? If top technical analyst Abigail Doolittle is right, it’s not time exhale.

Doolittle tells us charts still signal trouble, despite Wednesday’s bounce.

The S&P closed Tuesday below its 50-day moving average, about 1370, for the first time since December. Not only should 1370 have been support but during the rebound it generated resistance, though bulls were able to push above that level in afternoon trade.

“Now watch 1385,” Doolittle tells us.

Her proprietary research suggests that’s a key level – “it’s the difference between a descending trend channel and a bull pennant,” she tells us. That’s complicated but the analysis is actually quite simple.

“If the S&P can climb above 1385 there’s a good chance it will trade back up into a sideways trend – sending it to 1420,” Doolittle explains. However, if the market can not make its way above 1385 – the more likely scenario according to Doolittle - then there’s more selling to come.

“Below 1385 and the S&P would be making a bearish consolidation – if that's the case then it should drop down to 1340. And if that doesn’t hold, we’re looking at a big bearish mess.”

That’s something Guy Adami says, too.

“If S&P ends the month below 1340, we’re looking at an outside reversal month to the downside.” That's an extremely bearish signal.

"Just like the outside reversal higher last October was a bullish sign, the reversal lower would be equally negative. That would suggest weakness will continue for an additional few months,” says Adami.

Other signals in the market appear to be equally problematic.

“The Dow is looking pretty bearish – yesterday it filled a triple top pattern,” Doolittle adds.

And looking at the Materials and Energy sectors , both of which led the rally, “they’re both making a rounding down 50-day moving average. It speaks to the intermediate uptrend reversing down.”

What do you think? We want to know!

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Trader disclosure: On Apr 11, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long AAPL; Jon Najarian is long GS; Jon Najarian is long INTC; Jon Najarian is long IBM; Jon Najarian is long HFC; Jon Najarian is long WNR; Jon Najarian is long RIMM; Jon Najarian is long SBUX; Jon Najarian is long RIG; Jon Najarian is long FSLR; Jon Najarian is long TSL ; Jon Najarian is long THOR; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long CIGX; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long COP; Steven Weiss is long JPM; Steven Weiss is long CSC; Steven Weiss is long BRCM; Steven Weiss is long JPM; Steven Weiss is long BAC; Steven Weiss is short AAPL SHORT PUTS

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