Watching investors buy stocks on bad news has been enough to persuade reliably bearish Bob Janjuah to change his mind.
The Nomura analyst said that as long as the market holds its ground from the latest buying spree, being short doesn't make sense.
Specifically, he told clients in a note Tuesday to watch the 2,020 level on the S&P 500. As long as that holds, he thinks the market likely is going up and may even make a run at its historic high.
Weak economic data, ironically, forms the base for Janjuah's theory.
U.S. payrolls growth has slowed considerably in recent months, with September's 142,000 growth helping confirm that the economy is decelerating. Signs of deflation or at least disinflation have cropped up as well, and earnings season is off to an unspectacular start, with S&P Capital IQ on Tuesday projecting a profit decline of 5.1 percent for the S&P 500 in the third quarter.
Market participants, though, have been buying on the disappointment. The S&P 500 has jumped 5.8 percent in October after being down more than 6 percent for the year heading into the month.