Craig Johnson, CMT, Doesn’t See Drawdown Ending Soon

Chief market technician at Piper Jaffray, Craig Johnson, CMT, former President of the CMT Association and current Chapter Chair of the Minnesota Chapter was featured on CNBC's "Trading Nation" Tuesday, urging caution about the nature of the market's most recent drawdown. 

"We had this kind of fake-out/breakout scenario. It's ended up becoming a fake-out similar to what we had seen in 2000 and 2007 and now we're coming back down to retest support at 2,700," said Johnson. "Usually when we get to this kind of weak internal readings we end up seeing some sort of flush-out. I think that flush-out is still ahead. I think it's going to be another 5 to 10 percent lower from here and it's probably going to take about 14 to 16 weeks to work out itself out." 

"Before Tuesday's session, the S&P 500 had not traded below 2,700 since briefly touching and bouncing off that support level in late June," specified CNBC reporter Keris Lahiff.

Johnson went on to say that he foresees a long-term uptrend support line around 2,500, which is where he would call an investable bottom. 

Read the full report and watch the Trading Nation segment here: Stocks could fall another 10 percent before finding a bottom, Piper Jaffray technician says