"Our 2016 angle was 'stealth buck bazaar is revealed' and we anticipate actual bound that it's acceptable credible that we are in a buck market," Jonathan Krinsky, MKM Partners' arch technician, told CNBC's "Fast Money" recently. "The S&P 500 is now down added than 11 percent from its May high."
"I anticipate that ultimately this third analysis of the August low apparently gives way and the next akin [of support] is 1,820," added Krinsky. During Friday's swoon, the ample bazaar basis had its affliction day aback Aug. 24, and broken that month's everyman levels.
"But added importantly, for the aboriginal time in three years we are in a downtrend," Krinsky added. "The 200-day affective boilerplate is durably to the downside, so if you are aggravating to buy the dips it's agnate of affairs the rallies over the endure three years."
For Krinsky, the worst-case book for the S&P 500 could be a re-test of the blemish from 2007, which comes in about 1,575. "It seems alarming but that's alone about 25 percent off the highs and that's able-bodied aural the borders of accustomed pullbacks," he said. That's a added than 16 percent move from Friday's amount of about 1,885.
Furthermore he acicular to the Russell 2000 (.RUT), which is already in a buck market, as a "leading indicator" for area large-cap stocks are heading.
"The Russell 2000 is already down 22 percent from its highs," Krinsky said. "When the S&P 500 didn't yield out its August low, the Russell did. It's authoritative lower lows and we anticipate the Russell goes aback and re-tests its 2011 highs of 875." He said it's if the small-cap basis gets to that 875 akin if the S&P 500 is in absolute jeopardy.
In this affectionate of agitated environment, Krinsky appropriate advance in low-volatility names like utilities (XLU) and customer staples (XLP-MX) and alienated top beta stocks.
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