Analyst Warns Of Q1 2016 Correction

As 2015 comes to a close this week, Ari Wald of Oppenheimer and David Seaburg of Cowen talked with Brian Sullivan on

about what the start of the new year will bring for stocks. The analysts warned of a Q1 2016 correction. Ari Wald of Oppenheimer and David Seaburg of Cowen warn of a Q1 correction on the horizon. Oppenheimer's Wald believes a cautious stance is going into the first quarter because more work needs to get done as a result of the four year uptrend on the S&P 500 which was seen in the summer. Wald stated that mounting selling pressure, indicated by declining stocks falling on heavier volume than advancing stocks have risen, 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 went back and forth between positive and negative returns throughout 2015. With this last week left in the year, the S&P finished on Monday almost flat on the year. 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," Seaburg said. 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.