Stocks may see more volatility but correction may be nearing end

Nicholas Colas, cofounder of DataTrek Research, thinks that there will be “more volatility ahead” for the stock market.

Using the Dow Theory but focusing more on trade-related stocks, Colas noted in a Bloomberg article that the “trend is not positive”.

Colas wrote that while the Dow Jones Industrial Average is down 1 percent for the year, the S&P 500 is down only 0.4 percent and large-cap technology stocks are up 4.1 percent.

“The Dow is telling us that we’re not out of the woods yet,” he wrote. Stocks that are highly exposed to trade are all “still under pressure” and these, he claimed are the leading indicators of investor confidence.

In contrast, Simon Maierhofer, founder of iSPYETF and publisher of the Profit Radar Report, thinks that the stock market has bottomed.

“In general, big daily swings are always seen near bottoms,” he wrote on MarketWatch.

Maierhofer sees the likelihood of one more new low.

However, he added: “With or without the new low, the weight of evidence suggests this correction is nearing its end.”