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Stocks Will Blast 10% Higher in 2014: Citi’s Levkovich

Daily Ticker

For the past four years, a chorus of doomsayers have been dismissing the stock market's rise as a "sucker's rally" -- a temporary head fake in the middle of a long bear market.

This year, however, those voices have gone quiet, and everyone has begun to embrace the idea that we're in a new roaring bull market. All of the major indices are up more than 10% for the year, and the Nasdaq is up almost 20%.

Related: Humans vs. Machines: Nasdaq Outage and Aftermath Expose Market's Weakness

Alas...

Stocks have stopped charging higher and are now stumbling. Today, the Dow Jones Industrial Average dropped more than 100 points and hit a 2-month low. As ever, the verdict on this state of affairs is split. Some analysts think the recent weakness is the start of a new crash. (Fund manager John Hussman, for example, thinks that stocks could drop 40%-50% from the peak). Others, however, think the stumble is just a "dip" that wise investors should view as a buying opportunity.

The chief U.S. equity strategist at Citi, Tobias Levkovich, is in the "dip" camp.

Levkovich thinks that, near-term, the weakness could continue. Investors have gotten so bullish in recent days, he says, that the market still has some euphoria and froth to burn off.

Related: 3 Reasons Why Americans Should Care About the Indonesian Market Crash

But longer term, Levkovich argues, we're still firmly in a new bull market.

By this time next year, Levkovich predicts, the S&P will hit 1825, a full 10% above today's levels.

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