This session marked the second day in a row that stocks faltered following a solid gain in July, which many analysts are calling a bear market rally. Another could be on its way, according to Katie Stockton, founder and managing partner of Fairlead Strategies.
“We have had some minor breakouts and those breakouts could contribute to a more extended relief rally,” she said on CNBC's “Closing Bell” Tuesday. “But it won’t be like the one seen in July.”
The next key resistance level for the S&P 500 is at about 4,270, a gain of more than 4% from where the index closed Tuesday, she said. It may be hard for investors to catch, however.
“With these relief rallies in bear market cycles, they’re super difficult to take advantage of,” Stockton said. “You have to be there on the right day.”
She added that she sees the June dip on the S&P 500 as an intermediate low. While gains in a bear market rally can be impressive, they usually give way to lower lows, Stockton said.
