The market watcher who predicted the December plunge believes the new highs are sustainable.
Ned Davis Research's Ed Clissold cites a better-than-expected earnings season as a key factor in his bullish forecast.
"Expectations have been lowered so much that it's not going to take a whole lot of good news for companies to beat estimates," the firm's chief U.S. strategist said Tuesday on CNBC's "Futures Now. "
According to Clissold, despite fears of an earnings recession, the ingredients were never quite evident.
"If you look at the earnings expectations across the board, there isn't one or two sectors that are showing that this is a big risk at this point," he said. "So, the odds of a major earnings collapse seem pretty low at this point."
It appears Wall Street worries over earnings are fading fast. With just 16% of the S&P 500 firms reporting quarterly numbers, the and Nasdaq closed at record highs of 2,933 and 8,120, respectively, on Tuesday.
"It's going to be a grind higher from here because we've relieved so much of the panic from the fall," Clissold said.
His official S&P year-end forecast is 2,950 — just 10 points away from the index's all-time intraday high hit on Sept. 21.
"The economic environment isn't one that is going to be gangbusters. It's a good growth environment, not great, " Clissold said. "The 3,000 level could become a magnet."