Courtesy of Benzinga.
As 2015 comes to a close this week, Ari Wald of Oppenheimer and David Seaburg of Cowen talked with Brian Sullivan on CNBC’s Trading Nation about what the start of the New Year will bring for stocks. The analysts warned of a Q1 2016 correction.
Wald’s View
Oppenheimer’s Wald believes a “cautious stance” is going into the first quarter due to more work ahead as a result of the four-year uptrend on the S&P 500 seen in the summer.
Wald stated mounting selling pressure, indicated by declining stocks fell on heavier volume than advancing stocks have risen. He said this may point to a bull market correction in the coming months.
“That’s typically an ominous signal,” as it often leads to a correction, Wald stated.
The S&P 500 has gone back and forth between positive and negative returns throughout 2015. With this final week of the year, the S&P finished Monday almost flat on the year.
Seaburg Chimes In
For Seaburg, the outlook is “not so much a correction,” but rather he views this as a sentiment trade. “Hedge fund redemptions are going to pick up in Q1. We are probably going to continue to see bankruptcies in energy and that is going to scare a lot of people,” Seaburg said.
“Certain pockets of the market are still extremely investable. For example, technology, e-commerce and anything tied to online advertising,” he stated.
Seaburg believes that Q4 numbers for such companies will be very solid. He believes there are “pockets” in the market with technology stocks that traders can continue to invest in.
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