It's been said in New England that if you don't like the weather, just wait a minute. And it's also being said on Wall Street right now that if the stock market is not pushing to fresh, new record highs, just wait a day. The thought being that the rally in stocks which is now nearly four and a half years old, that has registered two dozen record highs just since the end of March, still has more to go.
"I think it's something the market needs and wants and probably will get that nice psychological 1,700 out of the way," says Jonathan Krinsky, chief technical market analyst at Miller, Tabak & Co. in the attached video.
In fact, while many feel this uptrend is losing steam, Krinksy sees symmetry with a spring rally that, if repeated, he says would take the S&P 500 to 1,712 in the short term.
"That April to May rally was about 25 trading sessions, and it rallied roughly 12%. Currently we are about 22 sessions long and right around 11%," he says of the rallies' similar scope and duration.
While many have looked skeptically at what they see as an aging bull market, S&P Capital IQ strategist Sam Stovall has argued otherwise, pointing out that the current 52-month old bull market is still shorter than average, as is the percentage of trading days where all-time highs were set.
While Krinksy says investors can always find reasons to be cautious, he's taking action to capitalize on an expected breakout in bond yields, and suggest it is time to own the (TBT) the ProShares UltraShort 20+ Year Treasury ETF.
"The 10-year yield spent the better part of two years between 1.4% and 2.4%," he says, before breaking out to 2.75% earlier this month,and then subsequently dropping back to 2.5% again.
"To me, the fact that we've held above [that two year trading range] does suggest that yields are poised to move higher," he says, noting that a seven year downtrend line is also close to breaking. "If you get back above that 2.75% level I think you could see yields well above 3%."
In the meantime, or more precisely on the way to those higher yields, it seems clear that the stock market has at least one more big push up its sleeve, and that more news highs are likely.