Out Fox The $treet

Of course not. Why would the market ever breakout to new highs? Aren't the financial markets headed for collapse? According to Laszlo Birinyi, president of Birinyi Associates, in this CNBC report the possibility really exists for a further 24% increase this year to 1,700. The good news is that just about every market pundit has blown off this view that the possibility increases. A 35% gain in the markets is far from unprecedented especially when the year began with sub par valuations. According to Birinyi, this is just a continuation of the bull market began back in 2009. According to him, this run looks similar to the 1982 and 1990 runs. Neither is likely to be repeated, but for any investor to dismiss the possibility would probably be reckless. Especially considering any break of current levels ushers in a return to old highs in the 1,500s. A further break of that would likely lead to nice gains beyond the old high leaving 1,700 as a likely stop. Laszlo has been bul...

Laszlo Birinyi remains one of our favorite market prognosticators with his willingness to literally stick his neck on the line with very bullish calls that the market will at least exceed 2,000 in the next 13 months. In other stories, he has even predicted the eventual bull market could top out around double the current level. Considering the typical analysts will hardly predict 1,450 on the market much less 1,500 his prediction really sticks out. Most analysts still debate whether the market will avoid another recession and anybody predicting doom and gloom obtains more press coverage. Below are some details and a clip from his interview on Breakout.  My only concern is that uber-bear and host Jeff Macke sure appears to be turning bullish. Or at least he doesn't push back on Laszlo that much allowing his bullish case to remain unscathed. Birinyi puts the market into context via a model which categorizes a bull move into a template of four phases. Think of it as the 5-stage...

Apparently traders had been very busy buying puts this week as the put-call ratio hit 1.15 on Tuesday. Typically when this ratio hits this level it signals a near term bottom. Interesting that it occurred so close to the top this time, but considering a lot of the 'risk on' stocks were down 15, 20, or 25% from recent highs maybe that explains the level of fear was extreme even if the overall market didn't show it. See the below chart from Birinyi Associates via CNBC . It shows how 4 out of 5 times since the March 2009 bottom that this ratio signaled the bottom.