One under-the-surface market metric could signal a bull run

After the S&P 500's massive surge off December lows, investors are left to wonder whether this bull market has more room to run.

Ari Wald, head of technical analysis at Oppenheimer, sees one internal marker that could offer proof of this rally's staying power.

"We're looking at internal breadth," Wald said on CNBC's "Trading Nation" on Tuesday. This rally has "been underscored by broadening internal breadth, and one way to measure that is the percentage of stocks on the NYSE above their 200-day moving average."

The number of NYSE stocks above that long-term average recently moved higher than 40 percent, a four-month high, says Wald. That is also the same level when the market reached its peak in December last year.

"So, there's incremental improvement occurring, that's what this indicator is suggesting," he said. "If you look back historically and ... from a bigger picture perspective, you like to see this reading get closer and to get above 60 percent. That's been the final confirmation to mark a new upturn."

Gina Sanchez, CEO of Chantico Global, says this bull market run depends on one thing: the Fed.

"The earnings numbers are still positive, but they're going to continue to slow throughout the rest of the year into a natural slowdown," Sanchez said Tuesday on "Trading Nation." "What actually I think is putting some support under stocks is the fact that you have the Fed being more accommodative than the markets were expecting."

The Federal Open Market Committee has turned more dovish in recent months, growing more concerned about the potential for an economic slowdown. The monetary policymaking arm of the Federal Reserve has said it will be "patient" in its approach to the federal funds rate.

"Normally in this part of the cycle you have very strong growth, that strong growth is usually matched with inflationary pressures, and those inflationary pressures lead to interest rate rises," said Sanchez. "So the reality is that we're probably not going to see some of those interest rate rises as fast for the rest of the year, and that is positive for stocks."

Minutes from the Fed's January meeting will be released at 2 p.m. ET on Wednesday and could shed more light on the central bank's policy plans for the rest of the year.

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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