NEW YORK - Technical and seasonal indicators that investors use to gauge the U.S. stock market's health show it may be time to buy, though upcoming inflation data and the third-quarter earnings season could still throw Wall Street a curveball.
"The preponderance of evidence supports the case for a year end rally," said Ed Clissold, chief U.S. strategist at Ned Davis Research. However, he said, "it remains to be seen if the market has begun a multi-month topping process." Those two factors have occurred together only 14 times since 1990. In 12 of those times the S&P 500 was higher six months later, Turnquist said.
But rising bearish sentiment often works as a contrary indicator for stocks, suggesting plenty of investors are on the sidelines who could buy on positive developments.