TECH - Market Correction Due: Stocks Are Running Out Of Reasons To Move Higher Analyst Says | Benzinga
Stocks need a reason to move higher, and the market is running out of those reasons. Thus, Craig Johnson, chief market technician at Piper Sandler, believes a market correction is imminent.
“Some of the internal indicators that we produce have just given us a sell signal,” Johnson said on Monday, while appearing on Benzinga’s PreMarket Prep.
“When we’ve seen this signal in the past, it’s been a pretty good indication looking forward over the next three or four months — it could be just a pullback or a correction. But it’ll definitely be more than just noise,” he said.
Johnson noted three technical indicators, including a decline in the number of industry groups that were above their 40-week average, while the number of new highs among these groups peaked at the end of 2023.
“All of this happened as the market was working its way higher, so this market is really going up on bad breath,” he said.
“So, we’re saying: ‘You don’t have to let go, but hold on loosely.’ Be ready for a correction in this market that could probably take the S&P 500 back to about 4,600,” Johnson said, adding that the low is likely to come towards the end ...