S&P 500 Will Extend Gain 10%, Acampora Says: Technical Analysis

(Bloomberg) -- The Standard & Poor’s 500 Index will climb at least 10 percent more this year after rising 50 percent from a 12-year low and topping 1,000 for the first time since President Barack Obama’s election, Ralph Acampora said.

The index climbed 1.5 percent to 1,002.63 yesterday, the highest close since Nov. 4, on growing speculation the recession is ending. Stocks have been bolstered by better-than-estimated economic reports, including data on gross domestic product on July 31 that spurred speculation the recession is near an end. The S&P 500 will gain at least 100 more points this year as a recovery takes hold, Acampora said.“I won’t say it’s clear sailing, but there really is a lot of room for growth,” said Acampora, who retired as one of Wall Street’s best-known technical analysts in 2007 and went back to work managing money this year at Geneva-based Altaira Wealth Management. “Any move above 1,000 will just reinforce this bullish market that’s unfolding. I’m looking at it as a positive.”

Obama’s victory on Nov. 4 was followed the next day by a 5.3 percent drop in the S&P 500, the biggest retreat after a presidential election. The index went on to plunge 33 percent through March 9 on mounting bank losses and rising unemployment. It has rebounded 50 percent from a 12-year intraday low on March 6, the steepest rally since the Great Depression, as government programs to unlock credit markets and restart economic growth boosted expectations of a recovery.

The equity benchmark’s close above 1,000 will spur further gains as it attracts mutual funds and larger investors who remained skeptical of the five-month rally, said Ryan Detrick, senior technical analyst at Schaeffer’s Investment Research in Cincinnati. U.S.-oriented stock funds lost an average 39 percent in 2008, a percentage point more than the S&P 500, and gained 19 percent in the second quarter, trailing the index’s 36 percent advance from March 9 through June. “Institutional money really moves the market more than the average investor,” Detrick said. “They know they’ve got to get in.”