Contrarian investor and Traxis Partners hedge fund manager Barton Biggs says we're in a cyclical bull market within a broad trading range — and for good reasons.

“Equity markets are looking ahead, not behind,” Biggs writes in Newsweek, adding that the bad economic news has already been factored into stock prices.

“Remember, this brutal bear market began in the summer of 2007, when the world still appeared to be booming.”

"My prediction is that we'll see a broad trading range somewhere between the March (S&P) lows of 700 and the 2000 and 2007 highs in the area of 1,450 to 1,500 over the next few years."

Biggs believes that real GDP growth could be positive in the second half of the year, maybe even sooner.

“Leading indicators, including new orders and the purchasing managers survey, are rising,” he points out.

“New home sales, the best leading indicator of the price of existing homes, seem to be stabilizing. Historically, the steeper the GDP decline, the stronger the rebound.”

Add to that the facts that credit and money markets have improved dramatically and spreads on everything from high-grade corporate credit to junk bonds have narrowed and you have a recipe for recovery this year, Biggs says.

Construction spending increased by 0.3 percent in March, the best showing since a similar rise last September, according to Commerce Department reports.

Economists surveyed by Thomson Reuters had expected spending to drop 1.5 percent for a sixth straight monthly decline.