Tom DeMark says the S&P 500 index has more room to run, according to a Bloomberg News report on Tuesday.
The technical analyst and market timekeeper says the broad market stock index is likely to hit 3,500 as the general stock market tries to catch up to the dizzying pace of gains on the Nasdaq Composite Index, which has set 28 record highs in 2020 While the Dow Jones Industrial Average and S&P 500 have yet to record a record since their respective peaks in mid-February.
Such an increase would see the S&P 500 increase by another 8% or so before DeMark predicts the rebound of the coronavirus for stocks reaches a crescendo.
“The update will be quick,” DeMark told Bloomberg in a recent phone interview. “And it’s going to catch people off guard.”
The S&P 500 SPX
It has already gained nearly 46% since hitting a recent low on March 23 following the coronavirus pandemic. The Dow DJIA
It has risen by approximately 44%, while the Nasdaq COMP, heavy on technology
it has increased 56% over the same period, FactSet data shows.
Large-cap technology stocks, including those of Tesla Inc. TSLA,
Microsoft MSFT,
Facebook FB,
Apple AAPL,
Amazon AMZN,
Netflix NFLX
and Google Parent Alphabet GOOGL
They have contributed disproportionately to this increase, leaving behind industries considered more economically sensitive, such as finance and energy.
Analysts say the broadening of the rally to other areas of the market outside the tech and e-commerce giants is looming, as evidenced by Tuesday’s moves on Wall Street.
DeMark uses a so-called momentum formula that compares the S&P closing levels to those of four days earlier among other complex indicators to make its determinations. At least that’s part of his complicated secret sauce.
So why listen to DeMark? Her predictions have earned her a certain amount of celebrity status on Wall Street, where she advises the likes of hedge fund luminaries George Soros, Stevie Cohen, and a host of other financial opportunities. Or as Josh Brown, of Reformed Broker fame and CEO of Ritholtz Wealth Management, describes DeMark: “In a world where everyone wants to be a timekeeper on the market, it could do much worse than follow DeMark’s calls.”
While average investors focus on buy and hold strategies, DeMark Analytics, the analyst firm based in Scottsdale, Arizona, makes money by charging merchants for access to their indicators.
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