The S&P 500 may be setting up for a breakout that carries the index toward 7,300 early next year, according to Wolfe Research technical strategists, who say recent market action is aligning with a bullish roadmap.
Track every analyst upgrade, downgrade, and target change in real time with InvestingPro’s professional tools — now 55% off. In a note to clients, analyst Rob Ginsberg highlighted that volatility has collapsed sharply.
“Well, we did it. Down 22% since last Wednesday, the VIX went out at the lows for the year today,” he wrote.
With volatility resetting, the firm argues the next catalyst will be whether the S&P 500 can clear overhead levels.
If it does, Wolfe says “we should see the October 29th highs taken out, with this recent consolidation counting toward a $7,250–7,300 objective early next year as the tape attempts to digest and reverse the weekly MACD sell signals.”
Bond markets are also said to be helping the bullish case. The analysts wrote that “Ten-year yields held channel support as this three-month base continues to build.”
However, not every sector is participating. Wolfe flagged that “the housing complex continues to act heavy, sitting at multi-year lows on a relative basis as we exit the year.”
The note also highlighted high-momentum moves in commodities, saying “Platinum is going parabolic,” which has helped South African miner Valterra break out of a multi-year base.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Beyond macro calls, Wolfe pointed to select single-stock opportunities, arguing that Sea Ltd. is poised for a rebound.
“Oversold at support with momentum inflecting positive, we like the risk/reward in Sea (SE) at current levels. The $145 area will be the first real test on the bounce,” wrote Ginsberg.
