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Technicals show the market has bounced, not bottomed: Craig Johnson - YouTube
Channel: CNBC Television
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i know from reading your notes
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that the technicals do not look great
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right now just how bad do they look in
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the near term
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well brian everybody's trying to put
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into the perspective is this a bottom or
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is this just a bounce and i think the
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answer is this is just a bounce there's
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just not enough technical evidence yet
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to say that a true bottom has been set
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and when you go through and you just
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simply look at the charts look at all of
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the microsoft's look at apple look at
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adobe look at all these large cap names
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they're all in very easily definable
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downtrends at this point in time brian
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so
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as i look at this market i look at the
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setup it looks like you got another
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seven to ten percent downside we've been
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kind of honing in on around this 3 500
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level brian on the s p 500 as where we
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will likely find some support and
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perhaps at that point in time we can
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find our footing but right now the fed
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is not our friend and interest rates are
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certainly not our friend either at this
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point in time and the fed is clearly
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going to keep raising rates to try to
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push down inflationary pressures which
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means likely more pain for equities
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well we've had these gut wrenching days
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craig where you get you know thirty to 1
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downside volume to upside the vix pops
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20
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you know you've got no stocks on the
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nasdaq 100 that are higher we've had a
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couple of those days and yet the market
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still has not found a bottom what are
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you looking for is that i know there's
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not
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some big flag hey market bottom here
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but is there one thing over something
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else that you're watching for craig
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don't say yeah for stocks to stop going
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down i know that
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brian you mean nobody rings a bell at
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the bottom here i mean that's uh
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shocking right no what in all
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seriousness what we're looking for is
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we've got some indicators we're looking
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at in terms of market breadth those
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market breadth indicators brian have
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gotten to levels that have been
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commensurate with prior major downturns
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you and i have talked near the lows in
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2020 2018 um in those periods and even
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in 2007-89 those indicators are getting
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to those levels but i'll just say this
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brian it's only been the first week that
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we've gotten to those levels and this
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washed out breath indicators that we
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look at typically will be anywhere
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between six to ten weeks in this sort of
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washed out state we're week one so again
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i think it's going to take more time but
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i want to see that breath measure wash
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out i then want to see a little bit of
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an improvement an expansion in that and
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that'll be sort of for me the indication
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i'll be looking for to step in and get
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what i could define as a tradable bottom
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not maybe the bottom
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but here's maybe the big headline is
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that you are sticking by your
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end-of-year price objective
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of 47.75 i believe it is craig i mean
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that's bold that's big
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that is big and that's about 26 27
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upside from where we are now and
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certainly we've gotten a lot of pushback
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from investors as to why we're sticking
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with this and the answer is really
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history so when you go back and you look
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at these weak first halfs like you have
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discussed um there are indications from
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june to december you can get a 20 plus
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percent uh advance from here into year
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end if the breadth of the market starts
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to improve when we look at our our
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indicators that measure that market
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breath brian when we've gotten to these
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levels we see this breath expansion that
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happens i often think about it as
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sitting on a beach ball inside of a pool
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and watching that breath expand very
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quickly we can get 20 30 advances in a
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26 week period of time it has happened
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and that's exactly what i think will
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likely happen again once the fed comes
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back and says
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we've sort of accomplished our goals
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inflationary pressures have come down i
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think the market will respond very
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quickly
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but that's it right that's we've got to
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history says along with the charts we
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have got to have the fed
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pivot we've got to have the fed change
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their tune
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maybe at the jackson hole conference in
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august some are suggesting right
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absolutely it could be that and then
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don't forget about midterm elections
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coming it could certainly uh boost
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investor confidence
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