A capitulation event is likely in October before stocks can ride a year-end rally, according to Bank of America. Investors are coming off the worst month of the year for the S & P 500 and Nasdaq Composite . They lost 4.9% and 5.8% in September, respectively. There may be more challenges for traders in October, which has a reputation for its big intramonth drawdowns, BofA technical research strategist Stephen Suttmeier wrote in a Friday note. In fact, the S & P 500 broke through key support at 4,325 to 4,335 last week, before a rally Friday stalled at those same levels, according to the strategist. That means prior support has now become resistance for the broader index. .SPX YTD mountain More trouble ahead for stocks in October? The strategist sees further downside risk to 4,200 for the S & P 500, with the next support at 4,114. The broad index closed Friday at about 4,288. “The breakdown below 4335-4325 is bearish entering October and suggests risk on the SPX to the 4200 area (rising 200-day [moving average], June breakout point and 50% retracement), which means that we favor an undercut of last week’s low at 4238,” Suttmeier said. “The next resistance is 4375-4402 (9/21 downside gap and rising 100-day MA). The next support is 4114 (61.8% retracement),” he added. What’s more, the strategist pointed out the rebound off last week’s low of 4,238 did not correspond with capitulation with the 3-month VIX relative to the VIX. The Cboe 3-Month Volatility Index and Cboe Volatility Index are used in tandem to measure volatility in the S & P 500. The former gauges the S & P 500’s implied volatility over three months, while the latter reflects the index’s 30-day volatility. “We believe that an oversold capitulation event on a move below 1.0 for the VIX3M/VIX is more likely in October,” Suttmeier said. “This is likely a key ingredient ahead of a yearend rally for the SPX.” Still, the strategist is bullish on stocks in spite of the seasonal weakness. He expects market activity in 2023 will eventually resemble other challenging years, when equities eventually shrugged off negative headlines to finish the year strong. Those years include 2012, when traders dealt with a Euro-zone crisis; in 2016, the year of Brexit and the election of former President Donald Trump; and 2019, with the U.S.-China trade war. “The late 2023 setup resembles those from late 2012, late 2016 and late 2019,” Suttmeier wrote. “This suggests that a test or undercut of the 40-week MA could precede a yearend rally.” — CNBC’s Michael Bloom contributed to this report.