The sequential bullish signal from Wall Street - stocks outpaced their market ratings

Perhaps the best option to see clearly, where is the stock market at the moment, is to compare stock prices with the analysts' expectations.

On Monday, 30% of the S&P 500 companies traded above the average target price. In other words, stocks are already reaching levels that were expected to be after 12 months. While this data may be enough for the bears to push the trigger, the story shows that investors will be advised to continue with their purchases. The discrepancy between asset prices and analysts' forecasts shows not so much the "redeemed" market but too conservative estimates.

Believe it or not, according to Chris Verrone, Head of Technical Analysis at Strategas, historically, this was a bullish purchase signal. The Verrone study shows that in 2002, there have been 12 cases where a large proportion of SP500 shares were above the average target of analysts, and 81% of these Long Signals have resulted in positive results of an average + 4.2% return.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

Bloomberg Markets: Stocks Are Rallying So Fast That Not Even Analysts Can Keep Up

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