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This chart could show that a bull market breakout is coming

Key Points
  • A big move for the market it coming, and it will take stocks much higher, Oppenheimer technical analyst Ari Wald forecasts.
  • Wald's chart shows that a short-term downtrend has recently been broken to the upside.
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Trading Nation: S&P 500 notches record high

A big move for the market it coming, and it will take stocks much higher. At least, that's what Oppenheimer technical analyst Ari Wald forecasts.

The narrowly notched an all-time high of 2,401.36 during Monday's session. This is significant since 2,400, which is about where the S&P topped out in March, has served as "resistance" for the market, according to Wald.

"A near-term breakout above 2400 would measure 2480, by our analysis, and we see 2380 as near-term support," Wald wrote in a Sunday note to clients.

On top of this, Wald's chart shows that a short-term downtrend has recently been broken to the upside.

More significant, however, is that the "bull market [is] intact," Wald said Monday on CNBC's "Power Lunch."

That's despite a long period of rising prices, and valuations that are now high compared with historical averages — trends that suggest the cycle of economic growth and rising prices is long in the tooth.

"The key conflict is between late-cycle valuations versus early-to-mid-cycle market behavior," Wald wrote to CNBC on Monday. "We side with how [the] market is acting and accordingly recommend a pro-cyclical portfolio allocation."

That is, he says investors should stay heavily invested in stocks, and particular in ones that do well as the overall economy grows.

Yet Kevin Caron, a portfolio manager with Washington Crossing Advisors, said investors as a group appear to be looking at things a bit differently.

With questions about whether inflation will actually head up, we've seen "market churning" as investors begin "rotating into some of the places that are now slow and steady, and not so much the things with the high torque and high beta," Caron said Monday on "Power Lunch," referring to a measure that compares a single stock's performance to that of the overall market.

Caron notes, for instance, that consumer-exposed stocks have begun to broadly outperform the more inflation-exposed financials.