Futures Now

A 'very rare' signal could send stocks to 2,400, says BofA

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They say that good things come to those who wait — and that couldn't be truer for the bulls on Wall Street, according to one technical analyst.

Bank of America Merrill Lynch's Stephen Suttmeier said Tuesday the market recently experienced a "very rare signal" that could lead the S&P 500 as high as 2,400.

There were 414 calendar days between the May 2015 high and the recent one, Suttmeier said on CNBC's "Futures Now." The S&P 500 has been churning sideways for much of the last 24 months, without a meaningful breakout. But it's that lack momentum that has Suttmeier convinced we could be on the brink of the next leg higher.

He explained that since 1929 there have been 24 instances where the market went 300 calendar days or more without making a new 52-week high, and in those times the forward return was much stronger than average.

"The bottom line is when I look at these numbers and if we do follow this signal, 250 days out the average return is about 15.6 percent, the median return is about 14.8 percent and the market is up 91 percent of the time," he said.

Furthermore, Suttmeier cited improving market breadth, which measures the number of companies in the market advancing versus declining, and the number of companies hitting new 52-week highs as confirmation that this recent move past new highs could foreshadow the next great bull run.

"If you look at the price pattern here, it does support the case to get up to about 2,300 or even 2,400, and that dovetails with those targets from that signal," Suttmeier said. That's a respective 7 and 11 percent from where the S&P 500 is currently trading.