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You could call it a valentine to the market.
MacNeil Curry, the head of global technical strategy at Bank of America Merrill Lynch, was bearish on the S&P 500 going into 2014. But now he says it's time to buy.
"Up until yesterday we had been bearish risk assets and the S&P 500," Curry said in a Friday note. "Yesterday's close above 1,823 says that view is WRONG and that the larger uptrend has resumed," he wrote.
The technician now holds that the recent strength in the S&P 500 "should project further upside for a test of the highs at 1,850—and perhaps on up to the long-term channel at 1,872."
What persuaded him to get bullish is the recent strength in the S&P, which has bounced nearly 6 percent off its lows Feb. 5.
"The setup was pretty bearish, frankly," Curry told CNBC.com. "We had the impulse of decline from the highs of 1,850, fairly negative seasonals, and a pretty sharp deterioration of breath. With all of that, I was pretty confident we would head lower and probably take a run at 1,711. ... That we've then reversed as hard as we have and started to trade quite bullishly says I'm wrong."
Earlier this week, he told CNBC.com that he noticed "breadth deterioration" in the market, "which is often what you see in a correction." He went on to note, however, that "if we close above 1,823, then things start to get more constructive."
The rebound "was really frustrating," he said. "But this is the nature of the biz. You get everything aligned and you take your shot. And you figure out where you're wrong when you're wrong, and move on."
(Read more: Byron Wien expects 20 percent gain for S&P 500)
Gold futures rose above $1,300 per troy ounce Thursday, breaching the round-number level for the first time since early November. And some traders say the precious metal still has a good deal of upside potential left.
"When you look at gold, it's been all about the technicals," said Brian Stutland of the Stutland Volatility Group. "As soon as we broke above $1,275 basically, it's been a straight push to $1,300. I think it continues—I'm looking around that $1,320, $1,340 level where gold could probably trade. The technical are just too strong behind it."
Like many traders, Stutland is watching closely for gold to reach its 200-day moving average, which falls at $1,308.
"I think it's a given that we hit that either today or at least next week here," he said on Thursday's episode of "Futures Now."
Gold is enjoying a great start to 2014, hitting a three-month high on Tuesday as it notches its first five-day win streak since August. But Credit Suisse's gold expert cautions against overstating the significance of the move.
In fact, he says that if the economy gets through its recent "soggy patch," gold could fall all the way to $1,000 this year.
"The fund flows that we've seen so far this year have been more short covering than new money coming in and adding to longs," said Credit Suisse's head of precious metals research, Tom Kendall, on Tuesday's episode of "Futures Now."
"I wouldn't be surprised if we see it trade up a little bit above $1,300 in the next couple of sessions," but "I think the momentum that we're seeing here is probably looking to exhaust itself in the not-too-distant future."
(Read more: Gold ends near 3-month high after Yellen remarks)
Kendall says it's about to get much, much worse for the precious metal.
"I think it's realistic to think of gold having a test of the $1,000 level at some point this year," Kendall said. "Now that's going to take well into the second half of the year, perhaps right toward the back end of Q4, before we can start thinking of gold going down to that kind of area. But that's not out of the realm of possibility by any stretch of the imagination, particularly once we get through this soft patch in the U.S. economy and we see real interest rates tick back up."
The immediate reaction in the futures market to the January unemployment report could only be described as confounding.
Within seconds of the report's release at 8:30 a.m. EST Friday, the S&P 500 e-mini futures promptly rose from 1,774 to 1,786, then dropped to 1,760. That represents a 1.5 percent market move, high to low, made in about 10 seconds.
The CEO of Euro Pacific Capital and a famous fan of gold, Schiff predicts that it will skyrocket once the Fed reverses the process of tapering quantitative easing and instead chooses to stimulate further so as to improve the economy.
"At some point, gold's going to go straight up like a moonshot," Schiff said on Tuesday's edition of "Futures Now." "Maybe it's going to take Janet Yellen to come out and call off the taper. Or maybe she's going to have to say, 'We're doing more of it, we're going to start increasing it.' I don't know what that magic moment is going to be."
(Read more: Gold ends nearly 1 percent lower as equities rally)
His call on gold was a good one for several years, before it staged a reversal while Schiff kept his opinion on the metal static. But he blames 2013's 30 percent decline on investors' inability to see the truth he perceives clearly. Because as the Fed buys assets more quickly (the opposite of what the central bank said it plans to do), the inflation Schiff has long called for will finally be created, leading gold to soar.
"For some people, they need a proverbial safe to fall on their head," he said. "But at some point, people are going to figure out what's going on. By the time the crowd figures it out, it's going to be very expensive to buy gold."
Marc Faber predicts that stocks will drop by 20 percent to 30 percent in the near future. But he personally hopes that they will fall even further.
"I think the market is way overdue for a 20 to 30 percent correction," said Faber, the editor and publisher of the Gloom, Boom & Doom Report. But that is "nothing that worries me," he said. "In fact, I'm hoping for the market to drop 40 percent so stocks will again become—from a value point of view—attractive."
Faber added with a chuckle: "But that is not the view of someone who is fully invested—obviously not."
(Read more: Why long-term investors should buy this selloff)
The problem, he said on Tuesday's edition of "Futures Now," is that the Federal Reserve's quantitative easing program has lifted asset prices substantially.
After a year of steady and quite remarkable gains, fear has crept back into the stock market. Concerns about the U.S. economy have joined emerging market weakness and jitters about the Federal Reserve's stimulus reduction to send the S&P 500 down 6 percent from the high reached Jan. 15. But savvy traders are advising long-term investors that this selloff is presenting a terrific opportunity to buy stocks at a discount.
"If you're a long-term investor, now's the time to be allocating," said Rich Ilczysyzn, senior commodities broker at iiTrader. "I know there's a lot of pension fund capital waiting to be allocated. They may wait for a specific trigger, maybe 5 percent, or maybe 10 percent. But it's not going to give the retail guy a lot of time to jump on. And what's going to happen is, people are going to miss the absolute bottom."
(Read more: The VIX is surging on market fear, but not loathing)
Ilczyszyn says he's using the dip to buy stocks for himself.
"For me, I'm adding because I've got a longer-term horizon. I'm looking out to the next 15, 20 years," he said. "If that's your time frame, you've just got to buy it."
Jim Iuorio of TJM Institutional Services expects the market will fall 8 percent from its recent high, meaning that 2 or so more percentage points of downside. But he says investors are better off buying early than late.
"I actually did call my brother yesterday—he's not a trader, he's an investor—and told him to start buying," Iuorio said. "For investors, it's time to start buying now, and increase buying as we get down closer to 8 percent of a correction."
(Read more: Market strategists: Don't overreact here)
As January comes to a close, many market participants will be tempted to fret about the "January barometer," which holds that stock performance in January predicts the performance over the rest of the year. In a January that has seen stocks slide 3 percent, this could become a concern. But investors would probably do well to ignore this long-standing market meme.
(Read more: Stocks down 4% in January! If history repeats ...)
Proponents of the barometer point to the fact that over the past 35 years, the S&P 500 has followed January's direction 71 percent of the time. However, this statistic is skewed by the fact that it includes January in that full-year performance.
That means that in years like 1987, when the market rose 13 percent in January but finished the year just 2 percent in the green, listening to the January barometer would have yielded a loss of some 10 percent—and yet this year is still counted as a success for the barometer.
Still, even if we merely compare January's performance to the path that stocks beat over the following 11 months, January still appears to predict the S&P's path 66 percent of the time. The problem is that it is much better at "predicting" winning years than losing ones.
Going back to 1979, the S&P rose in 23 out of 35 Januarys. Over the next 11 months, the market consequently rose in 19 of those 23 years that were kicked off by winning Januarys—meaning that a positive January has successfully predicted a winning February-through-December 83 percent of the time.
But in the 12 years when the market fell in January, the market only followed along in four years. That's just a 33 percent success rate.
The reason that positive Januarys prove to be a great barometer, and negative Januarys a terrible one, is the same reason that the "January barometer" appears to exist in the first place: Stocks rise.
Bill Fleckenstein is not ready to call the top for the market just yet. But pointing to the S&P 500's valuation, he says that once stocks do start to fall, the decline could prove extremely painful.
"The [price-to-earnings ratio] is 16, 17 times earnings," Fleckenstein said on Tuesday's episode of "Futures Now." "Why would you pay 16 times for an S&P company? I don't care about where rates are, because rates are artificially suppressed. Why isn't that worth 11 or 12 times? Just by that analysis, you'd be down by a quarter or 30 percent. So there's a huge amount of downside."
For Fleckenstein, a noted short seller who is famous for making money in the 2008 crash, the Federal Reserve's quantitative easing program has led investors to badly misprice stocks.
The Fed "printing money does not make the economy work, but it sometimes makes stocks go wild," Fleckenstein said. "The reason the stock market did well last year is because the Fed printed $1 trillion."
And as long as the Fed continues its quantitative easing program, and investors continue to have faith in the Fed, "it's not an environment in which you can put together a logical argument to be short and stay short," he said.
Yet if the Fed tapers, the story line could change—particularly if the Fed is forced to increase its QE program after cutting it.
The Federal Open Market Committee is meeting this week, and many expect the Fed to taper its quantiative easing program by another $10 billion, bringing the total amount of QE down to $65 billion per month. And while tapering seemed to be atop nearly everyone's list of concerns in 2013, traders expect the market reaction to the announcement of a further Fed taper to be muted.
"I do believe the Fed intends to announce a continuation of the taper next week, and I don't think it will be particularly shocking to the markets," Jim Iuorio of TJM Institutional Services said Friday, reflecting the views of many traders.
The two-day meeting starts Tuesday. A statement will be released Wednesday, followed by a news conference. This will be the final meeting chaired by Ben Bernanke, with Janet Yellen taking over at the beginning of February.
The Fed announced its first reduction of asset purchases in its December meeting, following months of speculation about when it would start to wind down its $85 billion program. The Fed also noted in December that it would watch employment data closely as it decides upon the future of its asset purchases. Although the December employment report showed that the economy created only 74,000 jobs, economists generally expect the Fed to cut down purchases by another $10 billion anyway.
(Read more: The Fed is trapped; buy gold now, Peter Schiff says)
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