The S&P 500 Stock Index should rise as much as 100 points over the next few months as sell-offs in June and July were overblown, says Lawrence G. McMillan, author and president of McMillan Analysis Corp.
While news headlines suggest the market is due for some fresh beatings, conditions in options markets suggest that bulls are growing in number on the sidelines and are antsy to get into the game.
"The bears had a chance to wound this market, backed by some overly negative reactions to European debt crises and U.S. debt ceiling limitations. However, they couldn’t really turn the indicators negative, nor even get the S&P to close meaningfully below its rising 20-day moving average," McMillan writes in a MarketWatch column.
"In my opinion, they lost their opportunity. Bullish cash has been building on the sidelines, and with the backing of buy signals from contrary option indicators, this should be able to propel the market higher to at least satisfy the expected 100-point rise in SPX, over the next few months."
Stocks recently enjoyed a shot in the arm of over news that Congress and the White House are close to a deal to lift the $14.3 trillion debt ceiling and avoid defaulting.
"It's important that there are slightly more positive tones coming out of Capitol Hill, at least averting an immediate issue with their debt ceiling," says Lothar Mentel, chief investment officer at Octopus Investments, according to Reuters.
"We're within the trading range, driven by good and bad news. The U.S. earnings season will be a positive catalyst and gives us more perspective, compared to the worries and concerns about the euro zone debt crisis."
© 2017 Newsmax Finance. All rights reserved.