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Three charts that prove the bull market has more room to run: Bank of America technician

Three key charts show this bull market has more juice left in it
Three key charts show this bull market has more juice left in it

Fears that the rally is on its last legs are a bunch of bull, according to one top technician who has three charts that prove stocks have more room to run.

"The S&P trend is still up ... and there's plenty of confirmation," wrote Stephen Suttmeier, chief equity technical strategist at Bank of America Merrill Lynch, in a note this week.

"When I look at that S&P chart, the very, very short-term trend is very bullish, as long as the support zone between 2,567 to 2,547 holds," he said Tuesday on CNBC's "Trading Nation." "So as long as you hold Friday's gap and the spike low from Thursday, this trend is still intact and there's upside potential towards that 2,620 to 2,650 range moving into late November." That's another 3 percent gain for the over the course of the next month.

Suttmeier also pointed to global participation as a catalyst behind the rally. He noted that the rise of the global weekly advance-decline line — which tracks equities from 73 different countries, including the U.S. – could be signaling an expansion of market breadth.

"The key takeaway from this chart is global breadth is bullish," said Suttmeier. "It's cyclically bullish, similar to how the market was set up in 2013, and I think it bodes well for continued global equity market rally. We don't see any signs of global equity breadth diminishing right here, right now."

Finally, Suttmeier pointed to an inverse relationship that has historically hinted at where equities are headed next. Specifically, Suttmeier examined what's called the High Yield Options-Adjusted Index (OAS). "The OAS is a measure of credit risk," said Suttmeier. "The higher spread suggests increasing risk and a lower spread suggests a more benign environment."

Suttmeier's chart shows that the index has moved in the opposite direction from the S&P, and the recent drop in the OAS is coinciding with the market's new highs. According to his chart work, that's a positive for equities.

"When you look at high yield, it's been a great coincident or leading indicator for the S&P 500," he said. "And quite frankly, seeing that high-yield options-adjusted spread go to the lowest levels since June 2014, it bodes well for equities."

The strategist actually believes the OAS chart is signaling an even bigger drop on the way. This means that if history repeats itself, as the OAS moves lower, then the S&P 500 will rally even higher.

The S&P 500 is currently up almost 2 percent in October, on pace for its biggest monthly gain since February.