Stocks are beginning to catch spring fever.
The Dow and S&P 500 closed at their highest level since Jan. 6 on Tuesday, fueled by a massive rally in the financial and technology sectors. The S&P has now bounced 9 percent from its recent low, and that has one veteran technician, calling for a near-term bottom.
On CNBC’s “Futures Now” Tuesday, Ralph Acampora said that stocks could soon surpass levels not seen since late last year.
“The S&P 500 is now poking its head above [its] 50-day [and nearing its 200-day] moving averages,” said Acampora. The S&P 500 closed above its shorter-term moving average for the first time this year last week and is trading less than 3 percent off its longer-term moving average.
“This tells me that this vacuum rally has more to go and I think the S&P has a near-term target upside of 2,050 to 2,100.” That’s as much as a 6 percent rise from Tuesday’s close of 1,978 and puts the S&P at its highest mark since early December.
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According to Acampora the market could reach those levels over the next couple of weeks, but the true test comes when we arrive there. “The big question is what happens when we get up there because we run into a ceiling that was all created last year,” said the director of technical analysis at Altaira. “It’s impressive near term, but once we get up there we will have to rethink things.”
Furthermore, he called on the Federal Reserve to back off in order for the volatility to remain muted. “The Fed is causing a lot of volatility,” he said. “In late January and February all we had was their comments pushing and pulling the market. So if the Fed would just keep its mouth quiet I think we’ll be fine,” he added.