Too Early To Call A Market Low, Says Stephen Suttmeier, CMT

A former CMT Association New York Chapter co-chair was featured on MarketWatch early this week with a distinctly cautious outlook for the short term. 

"Stephen Suttmeier, a technical research analyst at Bank of America Merrill Lynch, said there are plenty of oversold stocks and bearish sentiment is on the rise but the market has not quite deteriorated to a point where the negative trend turns into a contrarian indicator to buy," wrote Sue Chang, Markets Reporter. 

“More time and downside tests may be needed for a firm market low,” said Suttmeier, in a note he reportedly sent to clients. “This deterioration is seen across all the major U.S. equity averages and suggests a weakening or later stage bull trend from early 2016."

"For now, the S&P 500 is trading above its 12-month moving average while its monthly moving average convergence divergence (MACD) — a momentum indicator that illustrates the relationship between two moving averages of prices, remains a buy signal. But if the S&P 500 12-month moving average falls below 2,747 and the monthly MACD switches to a sell signal, the risk for a bear market will rise," reported Chang. 

Suttmeier was not entirely bearish, however, pointing out that November to April is usually a good time for stocks, as illustrated in the chart above. 

Tony Dwyer, Chief Market Strategist and Head of the U.S. Macro Group at Cannacord Genuity, is also quoted in Chang's piece, expressing similar sentiment. 

Read the full report here: This stock-market pullback probably has further to go, say analysts.