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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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Could Red Bull really take on Honda’s F1 engines in 2022?

Could Red Bull really take on Honda’s F1 engines in 2022?

As Red Bull assesses life without Honda in Formula 1, its options appear limited on current availability. But taking on the responsibility of producing its own engines could be a serious possibility, albeit at a high price. LUKE SMITH examines the next steps if Red Bull took on the challenge

Since Honda’s announcement last week that it will quit Formula 1 at the end of next year, the focus has been on Red Bull over its next move.

With just three power unit manufacturers set to be on the grid in 2022 and no sign of any newcomers joining the fray, the options appear limited.

Given previous uncertainty from both Mercedes and Ferrari to supply Red Bull back in 2015, Honda’s exit meant Renault – the very team Red Bull was so eager to split with five years ago – looked like the most obvious option for the future.

But there was also an alternative that did not include any of the three remaining power unit suppliers: for Red Bull to take over Honda’s power unit development itself beyond 2021.

Team principal Christian Horner repeatedly said on Friday when asked about Red Bull’s next step that it had to “consider all options”, but was clear that it could not simply function as a “standard customer team”.

“The team’s aspirations are extremely high: it wants to win, it wants to compete and win world championships,” Horner said.

“We need to take the time to do our due diligence on the options that are available to us in order to finalise our thinking, certainly by the end of the season, and most definitely before the end of the year.

“We’ve got to consider all the options, and then make decisions following that.”

Analysis: Could Red Bull take on Honda engines in 2022?

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How To Play The Cannabis Bull Market

How To Play The Cannabis Bull Market

A year ago, the cannabis industry was struggling with the challenge of the vaping crisis, which effectively shut down access to capital for most companies in the sector. As we entered the year, I was optimistic about a few things, including the launch of adult-use cannabis in Illinois, which I discussed here and an “underappreciated catalyst” that wasn’t receiving much attention. Then, the pandemic hit, which appeared to be a much greater threat than the vaping crisis. By May, though, it was clear that we were in a bull market, and I shared three reasons in this space in July to be bullish looking ahead, including the booming demand for cannabis, more states legalizing and potential federal regulatory reform.

Here we are in October, and, while the market has rallied sharply from its lows in March, we remain down substantially year-to-date per the New Cannabis Ventures Global Cannabis Stock Index:

The exact trajectory of the market likely depends upon how events unfold over the next few months, but I continue to believe that we are in a sustainable bull market, especially for American stocks. It’s not possible to give an exact playbook at this time, but I wanted to share some ideas about how to go about investing in cannabis stocks in the months ahead.

Stay on Top of Sub-Sectors

Several months ago, I suggested that cannabis stocks were no longer trading in unison and discussed 10 Sub-Sectors that I employ when I am looking at the sector. This year has seen some stark differences. For example, many American cannabis operators are up year-to-date, while almost all Canadian licensed producers are down. Within Canada, the retailers have substantially outperformed the LPs. I find

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Super-Strong Bull Market Eludes Most Fund Investors

Super-Strong Bull Market Eludes Most Fund Investors

Aside from the truly awful consequences of the coronavirus in terms of lives lost and the disruptions to our lives, there has been a big toll on those who use funds to try to create a path to their financial well-being. But, fortunately, for those investors who did not panic and stuck with their portfolios, the financial course appears to have begun the process of righting itself. While this almost always is what happens following chaos and uncertainty, the process may be a slow one before life, in all respects, begins to return to a more normal track.

For investors, two important trends summarize how the investment environment has changed as explained below.

The Virus Appears to Have Changed the Trajectory of Stocks and Bonds

You may be surprised to realize that, in spite of the fact that we currently are in a super-strong, recovering bull market after a deep COVID-19-induced bear market, all is not nearly close to being back to normal. Yes, the S&P 500 and, especially, the NASDAQ indices, are now up for the year, with the Dow Jones Industrial Average down just a few percent in spite of the pandemic. But does this mean that the negative impact of coronavirus on your funds has been largely overcome? For typical fund investors, not by a longshot.

Most investors probably hold a diversified group of different funds drawn from different fund categories. Look at the following category averages for different types of funds, followed by the performances of two “benchmark” type of index funds, one for international stocks and the other for bonds. Note that the COVID-19-induced bear market began on Feb. 20. So, if you held on to your positions from that date right up to now, let’s see how you have done compared to how you

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