The has enjoyed a nice start to the week, and at this point, record highs are around the corner, according to one technical analyst.
Referring to a chart of the S&P since 2011, Oppenheimer technical analyst Ari Wald wrote that "many of our cyclical indicators are also strengthening following a two-year decline, leading us to expect the rally to continue over the coming months amid the index's long-term trend channel (highlighted in chart)."
On Tuesday, the S&P opened at 2,085, which means it was nearly 2 percent away from retaking the all-time high of about 2,133 hit in July.
Wald said Monday he expects new highs in the second half of this year, with the market finishing the year around the 2,240 to 2,250 neighborhood.
The big events this week are Fed chair Janet Yellen's congressional testimony, and Britain's referendum on whether to leave the European Union. Although many believe that a leave win is unlikely, if it does prevail, the S&P 500 could go down 4 to 8 percent, Stifel Nicolaus' Chad Morganlander said Monday on CNBC's Power Lunch. If remain wins, Morganlander believes the market could rise 3 to 4 percent.
Morganlander added that although the economic cycle would not be very impacted by a Brexit leave vote, it does create uncertainty in the financial system.
"When you have valuations that are somewhat frothy, credit markets that are let's say priced to perfection, this can create a trading opportunity on the downside," Morganlander said. "Dollar strengthens, commodity prices also weaken, as well as emerging currencies, and that creates this risk-off appetite."