S&P 2300? Give It Four Years: Ritholtz Chart
secular measured breakout
Source: BAML

 

It took more than 13 years, but the S&P 500 managed to eclipse its 2007 highs of 1576 earlier this year. This move takes it out of a long term trading range, and according to the Technical Analysts at Bank of America Merrill Lynch, marks a transition to a new secular bull market.

Some folks might disagree with that characterization. The arguments against are that one cannot tell for sure (and certainly not this soon) after new highs if they are false breakout or not; they may not stick if earnings fall or rates rise. Further, given the Fed’s role in driving stock prices, once “the Taper” begins, all bets are off as to whether we stay in the new trading range above SPX 1576.

Note that the false breakout was hellish for traders in the 1970s . . .

 

Continues here

 

 

 

 

Category: Cycles, Technical Analysis

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4 Responses to “Merrill’s Secular Road Map Projects S&P 500 2300 in 2017”

  1. Mr.-Vix-It says:

    10 year inflation-adjusted rolling returns have been positive for far too long (since beginning of 2011) for this to be anything other than a secular bull market. Based on the past two secular bull markets, we are likely to see S&P 500 get near 8000 (let alone a paltry 2300) by the end of this secular bull. Obviously there will be serious corrections along the way to buy with both hands but even something as catastrophic as the ’87 crash couldn’t derail a secular bull. I can understand short-term negativity from investors but long-term it does not make sense here.

    http://allfinancialmatters.com/wp-content/uploads/2013/07/SandP500_10-Year_Rolling_Returns_with-CPI.pdf

  2. rd says:

    It all sounds reasonable.

    Congress looks primed to initiate a major spendng boom similar to the WW II “Arsenal of Democracy” spending which would potentially drive the market way up.

    Meanwhile, QE infinity should be equivalent of Nixon going off the gold standard once and for all which should be able to drive inflation up enough to drive the markets up quite a bit as they try to keep pace with the cost of living.

    It definitely sounds like I should sell all of my bonds and go 100% stocks.

  3. Anonymous37 says:

    It took more than 13 years, but the S&P 500 managed to eclipse its 2007 highs of 1576 earlier this year.

    Is that a typo? Was the high in 2000, or did it take more than 6 years?