In a recent note to investors, Goldman Sachs chief U.S. strategist David Kostin said the S&P 500 will rally to 2,050 by year's end. They see a combination of positioning (particularly stock buybacks), sentiment, and historic trading patterns leading the market higher by nearly 5 percent from here to all-time peaks.
But Goldman isn't stopping there.
"We remain confident in the fundamentals of U.S. growth and believe the S&P 500 will rally 14percent to 2,150 in 12 months," Kostin wrote.
Usually investors greet such bullishness with enthusiasm. But the recent volatility and the magnitude of the market rally in the past five years has made some market participants reluctant to pull the trigger.
"I have a hard time seeing a rally of that magnitude," said Gina Sanchez, founder of Chantico Global. "I have tremendous respect for David Kostin,and I think that he has generally been spot-on on the market. The problem that I see here is that the fundamentals just don't support it."
For Sanchez, a CNBC contributor, the S&P 500 is already fully priced for an economic recovery. That makes it hard to see any more significant moves to the upside. Yet she sees equities as one of the only places for investors to put their money even if she doesn't believe higher prices are justified.
"There's nothing else to buy," she said. "I'm recommending that my clients own equities and continue to buy equities."
The technicals may also be at odds with Goldman's longer-term target even if Kostin's year-end target is attainable.
"I don't think we can get up that high," said Mark Newton, chief technical analyst at Greywolf Execution Partners, of Goldman's 2,150 price expectations. Though Newton echoes Kostin's note that November and December are typically bullish as buyback activity usually increases, "we need to consolidate some of these gains before the market can go much higher," he explained.
Looking at a short-term chart of the S&P 500, Newton sees the index breaking below an intermediate uptrend – but not by 10 percent – only to recover its August lows. "The pullback didn't prove all that meaningful thus far," he said.
Newton's longer-term chart shows the S&P 500 remains well above an uptrend begun in 2009. Nonetheless, he worries about deteriorating momentum and breadth. "Any rally into the end of the year likely will be a selling opportunity next year," he recommended. "Although I think I'm constructive probably between mid-November and the end of the year, I think next year could be where some of those problems start to take hold."