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Here's why you should be scared of the markets right now: Acampora

The "Godfather of Technical Analysis", Ralph Acampora, Senior Managing Director at Altaira, doesn't like what he sees in the market and he explains why you shouldn't, either.

The "Godfather of Technical Analysis" is very, very worried about this market.

Ralph Acampora, Senior Managing Director at Altaira, trained generations of technical analyst over his 47 year-long career and was a founder of the Market Technicians Association. No one knows charts as well as he Acampora and right now, he doesn't like what he sees.

"The S&P 500 is hovering right above what a technician would consider significant support," says Acampora about the market benchmark index. That support level was roughly around 1,767 to 1,768, which was the low on December 18.

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"What's amazing is, in a quick couple of days, we erased all of those wonderful gains that we had in late 2013," says Acampora. "The last two or three weeks of 2013 were spectacular – all gone."

Acampora is particularly concerned that the rest of the market seems complacent with recent levels and that's leaving him befuddled. "I don't sense that anyone's really nervous," says Acampora. "I don't really understand. This emerging markets situation, it looks pretty scary to me."

And, while the so-called "fear index", the CBOE's Volatility Index (the VIX) is currently trading at around 17, up from 12 two weeks ago, Acampora thinks it's too low. "I would like to see that up to at least 25," he says. "I think maybe I'd feel a little bit better about this correction."

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For Acampora, the next target for the S&P 500 index is headed towards its 200-day moving average, or at least 1,746, its 125-day moving average. "From there, you could have one very nice snappy rally," says Acampora.

"For the first time in a long, long time, we now have overhead supply in the S&P," says Acampora about the technicals. "So, any rally off the 1,746 level I think is going to have trouble at some point when it gets back over 1,800."

To see the entire discussion with Ralph Acampora on the S&P 500, watch the video above.

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