Stock Rally to Continue: Technician
The near-term run-up in the S&P 500 appears to be heading toward 1,700, Steve Suttmeier of Bank of America Merrill Lynch said Tuesday.
"If it holds 1,600 I think we're positioned to move higher," he said.
On CNBC's "Fast Money," Suttmeier noted the volume intensity in the stock market, adding that proprietary analysis "supports the case for the S&P to move beyond that resistance, trend back up toward the May highs near 1,674 to 1,687, and perhaps even into the 1,700 handle once again."
Suttmeier also said that it appeared the S&P chart was building some support around 1,611 to 1,597.
"As long as it can hold 1,600 on any pullbacks here, I think we're positioned to move," he added.
Looking at the recent performance in CBOE Volatility Index, widely considered to be the best gauge of market fear, also suggested that stocks had farther to climb.
"The market is positioned to move higher based on those studies," Suttmeier said.
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In the Russell 2000, Suttmeier said that the small-cap index was showing positive signals for the broader market.
"The right sectors are leading," he said, noting that consumer discretionary had shown strength since the March 2009 lows.
Suttmeier also noted a breakout in the KBW Bank Index.
"Here you have an index of 2,000 stocks leading an index of 500 stocks," he added, noting that it showed the rally was not being driven solely by "select mega-cap names."
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"It's being driven by a broad-based group of stocks, and that's important," he said.
Trader disclosure: On July 9, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Simon Baker is long GS; Simon Baker is long BBRY; Simon Baker is long AMZN; Simon Baker is long GRPN; Simon Baker is long MTB; Simon Baker is long BKS; Simon Baker is long TSLA; Simon Baker is long MSG; Simon Baker is long DISH; Josh Brown is long AAPL; Josh Brown is long JPM; Steve Weiss is long BAC; Steve Weiss is long C; Steve Weiss is long M; Steve Weiss is long SODA; Joe Terranova is long VRTS; Joe Terranova is long TRV; Joe Terranova is long AXP; Joe Terranova is long OXY; Joe Terranova is long CRUDE OIL FUTURES.