by Heesun Wee
-Stocks yesterday surged on hopes for a bailout of Greece. As of Tuesday evening, no package had been announced but German officials were looking at how to build a “firewall” to prevent any systemic risk, The FT reported.

Whatever the outcome of Europe’s debt crisis, “we don’t think this bounce is going to be long lived,” says our guest John Roque, technical analyst at WJB Capital Group.

Short-term, the market is oversold; as of Friday, the S&P 500 had fallen about 5% below its 200-day moving average, a point where rallies typically begin, Roque says. But more lasting gains typically come when the S&P or Dow fall 8% off the 200-day moving average, or roughly 950 for the S&P, he says, predicting the current bounce will hit resistance at 1100 — at best.

Other signs the corrective phase isn’t over: Roque’s list of bellwether stocks — Goldman Sachs, Morgan Stanley, Freeport McMoran, Monsanto and Mosaic are all showing signs of technical weakness. A self-admitted omission — a tech name such as Apple — would be a neutral at best, he says.

Click “more” to embed the video, and get Roque’s long-term view on the market. What will it take to break out of S&P’s range of 800 to 1500 that’s been in place since late 1996?

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