Upside Surprise: S&P 1575 by Year-End?

Don't dismiss the bulls. Tony Dwyer, Chief Equity Strategist at Canaccord Genuity thinks the S&P has 250 points of upside. At least.

Here’s why.

During a live interview on CNBC's Fast Money Halftime Report, Dwyer tells us the technicals, fundamentals as well as history all favor acceleration into year’s end – a big acceleration.

Looking at technicals he says “bottoms are not a price they’re a process” and he believes the market is consolidating right now – a bullish phenomenon.

“We get into extreme oversold conditions and then we retest the lows.” That exactly how Dwyer sees the market right now. And historically when levels hold, the market sets up for the next leg higher.

Dwyer has a price target of 1575 on the S&P – which he calculated using a 15 multiple. And here’s where history comes in. According to the website Seeking Alpha, on average since 1942 the multiple has been 15.

In fact Dwyer believes his target is conservative. “15 is the lowest non-recession multiple in a sub-3% core inflation environment. The average multiple is roughly 20 times so I believe we are being overly conservative – even with our new target of 1575,” he says.

Looking at the fundamentals, Dwyer sees good things for the US economy.

“We’ve had an historic drop in interest rates as well as a huge drop in energy prices.” That’s good for consumers. And he adds we also have a slow recovery in housing – again bullish.

All told he says, “It should spell gains in the market. I think we’re setting up well.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On June 26, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Weiss is short JEC; Steve Weiss is short X; Steve Weiss is short MT; Steve Weiss is short JCP; Steve Weiss is long QCOM; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Cortes is long SVU; Steve Cortes is long TREASURIES; Steve Cortes is long DEO; Steve Cortes is short COH; Steve Cortes is short GLD; Steve Cortes is short QQQ; Steve Cortes is short EUR; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long C; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long FB CALLS; Pete Najarian is long MSFT; Pete Najarian is long MOS; Pete Najarian is long MMR

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