The stock market will soon experience a "minimum" two to three week pullback after the recent surge from the December doldrums, technical analyst Katie Stockton told CNBC Thursday.
"After such an impressive relief rally off of the December low, we do have some signs of exhaustion," Stockton said in a "Squawk Box" interview.
The founder of Fairlead Strategies, which specializes in stock chart analysis, added that she still sees a "bearish bias" from the sell-off in the fourth quarter of last year.
Stocks in December plunged in their worst Christmas Eve trading ever, with the S&P 500 sinking 2.7 percent and slipping into a bear market, defined as a decline in an index or asset of 20 percent or more from recent highs. The market had been in the soup since early October.
However, since the Dec. 24 close, the S&P 500 has rallied more than 16 percent through Wednesday's close, with more than 9 percent of those gains coming in 2019. The index remains about 7.3 percent below its record closing high of 2,930 on Sept. 20, 2018.
Stockton said the pullback she's predicting would hit stocks broadly, including emerging markets.
Some market veterans, including CNBC's Jim Cramer, blamed the Federal Reserve for the market's losses late last year, arguing Fed chairman Jerome Powell stoked fears after his comments on Oct. 3 that rates were a "long way" from so-called neutral. Powell then walked back those remarks on Nov. 28, and he's since pledged that future rate moves would be approached patiently, based on the economic data.
Krishna Memani, chief investment officer at OppenheimerFunds, told "Squawk Box," in the same Thursday interview as Stockton, that a "short" pullback could keep the "Fed at bay." He added, "If the market just keeps going up, then it brings the Fed back into play. We don't really want that."
U.S. stock futures were pointing to a lower open for Wall Street on Thursday, which would end a five-session winning streak for the S&P 500.
from Top News & Analysis https://cnb.cx/2Gqqk3j
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