Investors may see a satisfying ending to 2021.
According to Canaccord Genuity’s Tony Dwyer, extreme optimism and strong historical trends should offset overbought conditions in the market.
The result: A record finish.
“The internals of the market are still pretty sound,” the firm’s chief market strategist told CNBC’s “Trading Nation” on Monday.
In his monthly strategy picture book out Monday, Dwyer made a case for a 3% to 5% gain between now and the end of December based on the typical trend.
“We believe the year-end opportunity still exists based on history of strong years through October, the improved tactical backdrop, and our core fundamental thesis — but, we would be patient buyers,” wrote Dwyer.
He contends the market backdrop is very different than his “summer of indigestion” forecast.
“The broad market is acting better,” said Dwyer.
But potential heartburn may still be around the corner. Dwyer warns the final weeks of the year will get choppy.
“Broadly, the market should continue higher —a few more percent into year end,” he said. “But it’s going to be a lot more difficult than the last really 9% in the last five weeks.”
“It really comes down to a cyclical play versus an economically defensive play,” said Dwyer. “The cyclicals still have more room to run into year-end.”