The flurry of new stock market highs has hardly been abnormal and may be the beginning of a longer-term trend, according to Bespoke Investment Group co-founder Paul Hickey — and he has a chart to demonstrate this.
"It seems as if we've been hitting new highs every day recently," Hickey told CNBC's "Futures Now" on Tuesday.
"But as far as closing all-time highs are concerned, we've only seen about seven postelection. And, outside of the period right after Brexit where [we] saw 10, we've seen 17 so far this year. Looking back historically, there hasn't been an exceptionally large number of new closing highs in a given year. We tend to focus on what's happened recently, but already people are forgetting that for about a year and a half the S&P did nothing,"
Despite the "illusion" that the all-time highs have been fast and furious, Hickey says the odds are strong that the Dow will soon sprint to highs above the 20,000 mark — especially if retail investors begin to believe in the stamina of this rally.
"Less than half of investors consider themselves bullish at this point," said Hickey.
"Even after these new highs we've seen postelection, individual investor sentiment as measured by the American Association of Individual Investors still hasn't even gotten above 50 percent. So, individual investors not only have been sitting out this recent rally, but most of the bull market."
He believes it's not too late for investors to take part in the rally. It could still temporarily cool down, and that's when investors who haven't put money to work in this rally should strike, Hickey said.
"A small pullback could happen any time. It doesn't seem like that given the last several days. But the way we would look at a pullback here is for people who have been on the sidelines to add some exposure rather than to start panicking," said Hickey. "We should see earnings growth really pick up going forward into Q4 and next year."