Now that stocks have rallied back into the green for 2016, one technician is seeing definitive signs of a bottom for the year.
According to Craig Johnson of Piper Jaffray, improving market breadth has convinced him that investors have now seen the 2016 lows. The S&P 500's ability to break above its 200-day moving average was a "major hurdle," and the recent move above 2,050 has pushed stocks toward a new resistance level at 2,080, he said.
"If we can push through that, we're setting ourselves up from those 2015 highs, and we ultimately think we're going to get up to our year-end price objective of 2,350," Johnson said Monday on CNBC's "Trading Nation."
Such a rise would be another 15 percent gain for the S&P 500. Johnson acknowledged that his exceedingly bullish target may be out of line with other market watchers, but broader bearish sentiment could also be a contrarian signal to buy, he said.
"Very few investors believe at this point in time that we can get back to those highs and even exceed it," he said. "This market is on solid footing and ready for the next leg up."
On the other hand, the options market sees a substantial move higher for the S&P 500 as very unlikely, according to Stacey Gilbert, head of derivative strategy at Susquehanna.
"Some of the worst is already priced in here, although the likelihood of higher moves, if it happens, it looks like it's going to be much more of a slow grind than what we've seen over the last six weeks," she said Monday on "Trading Nation."
Gilbert said based on prices in the options market, traders believe a 10 percent move lower is much more likely than a 10 percent move higher. However, Gilbert also notes that the majority of bearish sentiment has subsided from its peak in the early year sell-off.
"The options market would certainly agree that these huge pops or these huge moves are not favored to be to the upside," Gilbert said. "That being said, I don't see anything indicating that people are nearly as bearish as even four weeks ago."
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