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Technicals suggest the S&P 500 could jump 30% in a current bull market cycle that will extend to 2022, Fundstrat says

Technicals suggest the S&P 500 could jump 30% in a current bull market cycle that will extend to 2022, Fundstrat says

NYSE trader
  • The S&P 500 could surge 30% from Monday’s close to 4,600 in a bull market cycle that extends into 2022, according to a technical analysis note from Fundstrat.
  • The cycle backdrop for stocks remains bullish and is still improving, market breadth is expanding, and the laggards are bottoming, the note highlighted.
  • “We would encourage investors to keep in mind the improving longer-term cycle backdrop underway that should support equities well into 2021,” Fundstrat said.
  • Visit Business Insider’s homepage for more stories. 

The stock market should continue its run for at least another two years, according to a technical analysis note from Fundstrat sent to clients on Tuesday.

Specifically, monthly cycle indicators point to a continued uptrend that is supportive of the S&P 500 rising to 4,400 to 4,600, representing potential upside of 25% to 30% from Monday’s close, respectively. 

“Our long-term monthly quadrant balance oscillator, tracking 2-4 year market cycles, continues to build positively from oversold levels signaling the current cycle likely has room to run into 2022,” Fundstrat analyst Rob Sluymer said.

The percentage of stocks in the S&P 500 with rising monthly momentum continues to rise from its COVID-19 low in March, and has plenty of upside left. This supports Fundstrat’s view that a new four-year cycle bull market “is still in the early stages of developing,” the note said.

On top of that, other bullish technical indicators are building a more supportive picture for stocks longer term.

Read more: Good deals in pandemic-hit companies are proving hard to find. Here’s how big investors that raised billions to pounce on corporate distress are changing up their playbooks.

New cycle highs in the outperformance of the S&P 500 relative to the US Barclay’s Aggregate Bond Index lead Fundstrat to continue recommending clients overweight equities relative

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Stocks extend gains with stimulus prospects in focus

Stocks extend gains with stimulus prospects in focus

Stocks traded higher Friday morning as investors continued to mull chances of a virus-relief package amid mixed signals from officials as to what size of a proposal they might support.

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The S&P 500, Dow and Nasdaq each closed at their highest levels in more than five weeks by the end of the trading day on Thursday. All three major indices were on track to rise for a third straight day, and post weekly gains of at least 2.7%, as of Thursday’s closing levels.

Traders have closely monitored developments out of Washington to weigh whether a comprehensive or partial stimulus package might emerge before Election Day on Nov. 3, with additional relief measures viewed as a key tenet in encouraging the recovery in the virus-stricken economy. The Department of Labor’s weekly report on new jobless claims Thursday morning showed a worse than expected 840,000 individuals filed for first-time unemployment insurance benefits last week, though continuing claims dipped back below 11 million for the first time since late March.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin discussed further stimulus in an about 40-minute conversation Thursday afternoon, Pelosi’s spokesperson Drew Hammill said in a Twitter post.

Hammill reported that Mnuchin “made clear the President’s interest in reaching” an agreement on a comprehensive package, after Pelosi said earlier in the day that she would not support a standalone proposal aimed at providing aid only to airlines. However, the White House has offered mixed signals as to whether it would in fact support a broader legislative package, with Trump and White House spokespeople offering conflicting takes on their willingness to back a more comprehensive proposal over the past couple days.

“A compromise on a big stimulus package in Washington could potentially deliver another October surprise, but the odds are against it

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Stocks look to extend gains after S&P 500’s highest close in a month

Stocks look to extend gains after S&P 500’s highest close in a month

Stock futures advanced Thursday morning, pointing to a higher open after the three major indices closed at their highest levels in more than one month a day earlier.

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Contracts on the Dow rose more than 120 points, or 0.4%, about two hours before the opening bell. S&P 500 and Nasdaq futures also gained. Shares of Regeneron (REGN) jumped more than 4% after the drugmaker said it had submitted a request to the U.S. Food and Drug Administration for emergency use authorization of its Covid-19 antibody treatment, which had been taken by President Donald Trump after his Covid-19 diagnosis.

Traders clung to hope that some aid out of Washington – if not a multi-trillion dollar, comprehensive virus relief package – might transpire in the near-term.

House Speaker Nancy Pelosi said Wednesday that she would be open to passing a bill to provide relief to airlines specifically, after Trump said late Tuesday that he would approve piecemeal measures including airline aid. Airline stocks, along with travel and leisure names, were flat to slightly higher in late trading, largely holding onto gains from the regular session Wednesday.

However, Pelosi also signaled that she would not be open to advancing a bill that would authorize another round of $1,200 direct checks to taxpayers, saying that that on its own would be insufficient to address the Covid-19 crisis. House Democrats last week voted to advance a larger package to inject another $2.2 trillion in aid to various parts of the economy.

“It’s been the question of the day, as to why we got the tweets we got over the last 24 hours, the market reaction we got into [Tuesday’s] close, and then the rally today,” Ed Mills, Raymond James Washington policy analyst, told Yahoo Finance Wednesday afternoon.

“Investors I’ve spoken to at Raymond

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