Another Buying-Panic Sends S&P Near 2,200 - BofA Sees "More Room To Run", Targets 2,425

Tyler Durden's picture

Even if the current rally in excess of 20% from the February low is the last one of the cyclical bull market from 2009, BofAML says there should more room to run. The average rally of at least 10% that is the last rally of cyclical bull trend (but not the only rally of the cyclical bull) has an average return of 46.88% (median of 30.97%) and an average length of 13.1 months (8.6 month median).

The S&P 500 is up over 21% from the mid-February low.

Many investors have asked how long can “this rally” last.

Historical data suggest that the rally from February may not be as stretched as some investors may think. The S&P 500 has had 96 rallies in excess of 10%, without a 10% drop, going back to 1928 with an average gain of 34.07% (21.52% median) and an average length of 7.8 months (2.7 median).

Projecting the median and average returns off the February low puts S&P 500 near 2220 and into the 2400-handle, respectively. 2220 coincides with our tactical 2225 projection...

 

The 2400-handle is consistent with recent cyclical and secular breakouts...

 

But there is a potential problem...The 25-day CBOE total put/call ratio has dropped below the lows associated with the prior S&P 500 peaks from April 2016, November 2015, and May 2015.

This overbought or complacent reading for the 25-day put/call ratio exceeds the levels from 2015 and is a risk factor.

At the same time, we note Savita Subramanian's equity market projections: Our S&P 500 year-end 2016 target is 2000.

Our target is currently based on a weighted combination of 1) our five factor framework, implying 2150, weighted at 70%, and 2) a 30% probability that the S&P 500 retests its recent lows near 1800 by year-end., giving us an official year-end target of 2000.

And 10-year Target: 3500...

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SomethingSomethingDarkSide's picture

The worst part about this is that every 401k Investor and Pensioner KNOWS that stocks and bonds are Powder Kegs - BUT CONTINUE TO STAY IN NO MATTER WHAT.

 

Sheep, to slaughter, one and all.

FreeShitter's picture

Yeah but what can go wrong at this point?

Paul Kersey's picture

Keep those market booming until after the election. Gotta make Obama and Hillary look good, even though Main Street Americans are living from hand to mouth.

MFL8240's picture

Compte an utter fraud by the TRIBE to rig an election!

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Aug 15, 2016 1:15 PM

Why stop at 2425?

zagzigga's picture

To take a pause for a bit and then go onwards to 2525

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) zagzigga Aug 15, 2016 1:23 PM

Makes sense

Hohum's picture

Trend is not destiny.

zagzigga's picture

What a freak show! Central Banksters deserve to be sent to the same prison as Madoff for running this multi-year ponzi scheme with money they don't have. The banksters destroyed the present and the future for most people so that a few might benefit from it. And what about the SEC which allows companies to get away with non GAAP crap? If no one's going to look at the GAAP numbers, why even have it at all? Just get rid of it altogether and have companies report only fantasy numbers to make "investors" feel warm and fuzzy.

buzzsaw99's picture

they always go up in the long run. my target is s&p 3000 bitchez.

Consuelo's picture

 

 

You're apt to be proven right.   I don't want to know how much food (and possibily even fuel) might be in that situation, but we're likely to find out.

ChemtrailPilot's picture

Chart-wanking aside, the whole point of bubbles is that if people are willing to pay 5x what something is worth, there's no reason they won't be willing to pay 10x tomorrow. Sure, the S&P might go to 2425. It "might" also go to 3000. just remember these 3 facts about all bubbles:

1) it continues until it stops

2) there is no way to know for sure when it will stop

3) it will eventually stop

PontifexMaximus's picture

Wasn't it BofAML, who "informed" me, that their clients are liquidating/selling their equities, as never seen before? Did I miss anythng? I know, I know, I'm getting old(er).

RawPawg's picture

Um,Sure....

why not

who really cares at this point?

after just so many hits,a person don't even register pain anymore. 

Jim Shoesesta's picture

This has got to be wiping out zerohedge followers......

Swamp Yankee's picture

Oh look, a scary chart that portends doom.   Never saw one of those before.

 

sarc /off.

Infield_Fly's picture
Infield_Fly (not verified) Aug 15, 2016 1:54 PM

31M shares with one hour to go on the SPY - that's about 25% of "normal volume.

 

This is how fucking retarded these markets are.

 

 

CB's are on both sides controlling any drop with massive buying and letting the market grind higher.

 

1)  There's no buying panic - just CBs fucking around

2)  SPX could move to 3000 with the CBs controlling everything - the upside is meaningless

spastic_colon's picture

blow off top in 1.....2.....3.....months/years - B of A

Keltner Channel Surf's picture

Definitely NOT a buying panic, otherwise we wouldn't be sitting at ~30% already low daily SPY volume as 3:00 approaches.

Instead, it seems the standard stair-step short covering on poor liquidity (in which algos return to goose just slighly above highs to tickle new day session stops every hour or so) is de rigueur

Will be interesting to see what the close holds, as it may set up a pre-FOMC level that could make for a dicey few minutes Wed at 1:59:30 ...

Here2Go's picture
Here2Go (not verified) Aug 15, 2016 1:58 PM

I'll say it again...

 

2.284 - 666 = 1.618 (the golden ratio)

 

1.618 * .618 = 999 (inverse of 666 S&P low)

 

Yes, these inbred fucks are that unimaginative & that retarded...

 

You're welcome (francis_sawyer)

Yen Cross's picture

     F/X sure aint buying this shitshow.

reynardyne's picture

I can actually see a 10 Year Target of 3500...

If, central banks are restriced to truly legitimate functions, and.

Countries begin a RADICAL step of controlling spending, regulations and fees.

And, perhaps, we see major nations return to a gold backed (or for mercy's sake backed with something real) currencies.

And, finally, in order to initiate this we go through a cleansing crash that puts the criminal class (Banksters and Hacks) in jails and warns the rest to behave better with OPM.

Call me a Dreamer...I can take it!