The big S&P prediction that 'no one believes'

The market's massive comeback from February's lows is far from over, according to one technician.

"We're seeing the S&P 500 retesting the downtrend resistance line off of those May highs of last year," Craig Johnson of Piper Jaffray said Wednesday on CNBC's "Power Lunch."

According to Johnson's work, the S&P 500's move above its 200-day moving average, combined with weak volume overall, sets the index up for a major breakout.

"No one believes it, but we think the lows are in for 2016, and we think we're still going to achieve 2,350 by year-end," Johnson said, referring to a level that is 14 percent above Thursday's opening price.


The S&P has bounced around unpredictably since making all-time highs in May, but Johnson has a clear picture of what the future will bring.

"We're bullish, and we believe the market is telling us that, and we want to continue to be long equities at this point," said Johnson.

But other market watchers are a bit more pessimistic about the recent momentum continuing.

Despite the bounce, the S&P 500 "never broke 2,075, and that's a problem," Michael Block of Rhino Trading Partners wrote in note to clients Thursday. On the downside, "that 2,034 to 2,035 level is support write now."

"Enjoy the coil and what follows," Block said.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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