[video] Quick Take: Lots of Reasons to Sell
NEW YORK (TheStreet) -- Although equities have managed to move off session lows, Greywolf Equities' Chief Market Technician Mark Newton told TheStreet's Debra Borchardt this pullback could just be the beginning.
Newton said market participants shouldn't make much of today's bounce, noting that in August we had a similar bounce following a Federal Reserve meeting before three to four weeks of weakness.
He added that while the Fed recently said it would not begin tapering its asset purchases, the market did peak shortly after. Volatility will likely remain in the near term as uncertainty surrounding the potential government shutdown and debt ceiling debacle continue to mount.
Newton added this is a seasonally weak time period for the broader markets and the S&P 500 could now head to the 1,655 to 1,660 range.Should that level fail to hold or the August lows around 1,630, the markets could be in for a long-awaited pullback. Even with sentiment becoming more and more bullish, he concluded that there are fewer stocks hitting new highs and momentum is waning, leaving the markets vulnerable for steeper declines. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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