Tom DeMark says that the S&P 500 index has more room to run up, according to a report from Bloomberg News on Tuesday.
The technical analyst and market timer says that the broad-market stock index is likely to touch 3,500 as the overall stock market attempts to play catch up with the blistering pace of gains in the Nasdaq Composite Index, which has set 28 record highs in 2020, while the Dow Jones Industrial Average and S&P 500 have yet to register a record since their respective peaks around mid February.
Such a rally would see the S&P 500 rise by another roughly 8% before DeMark predicts that the coronavirus rebound for equities hits a crescendo.
“The catch-up will be fast,” DeMark told Bloomberg in a recent phone interview. “And it’s going to catch people off guard.”
The S&P 500 SPX,
Large-capitalization technology stocks, including the likes of Tesla Inc. TSLA,
The analysts says that the glimmerings of a widening of breadth in the rally to other areas of the market outside of tech and e-commerce giants is taking shape, as evidenced in Tuesday’s moves on Wall Street.
DeMark employs a so-called momentum formula that compares closing levels of the S&P with those from four days earlier among other complex indicators to make his determinations. At least that is part of his complicated secret sauce.
So why listen to DeMark? His predictions have garnered him a certain amount of celebrity status on Wall Street, where he advises the likes of hedge-fund luminaries George Soros, Stevie Cohen and a host of other financial hot shots. Or as Josh Brown, of Reformed Broker fame and CEO of Ritholtz Wealth Management, describes DeMark: “In a world where everyone wants to be a market timer, you could do much worse than follow DeMark’s calls.”
While average investors focus on buy-and-hold strategies, DeMark Analytics, the analyst’s Scottsdale, Ariz.-based firm, makes money by charging traders for access to its indicators.
