Stock market setting up for a textbook seasonal correction, chart analysts say

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Last week's declines for the S&P 500 could be the start of an August slump.

Last week's hiccup in the stock market rally could expand into a seasonal slump, according to Wall Street technical analysts. The S & P 500 fell 2.27% last week for its worst week since March, closing at 4,478.03. The Nasdaq Composite fell 2.85%, also its worst week since March. .SPX 3M mountain The S & P 500's rally cooled last week.

technical strategist Jonathan Krinsky said in an August 6 note that the S & P 500 might need to fall about 6% to 4,200 before finding its footing again. "[T]he SPX put in a few ugly days last week and now is poised to test some support levels. Initially the rising 50 [day moving average] at 4406, but more meaningful support comes in at 4200-4300.

's Krinsky said. — CNBC's Michael Bloom contributed reporting.

 

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