UBS's Peter Lee: S&P Below 1,250 Triggers Stops, Cyclical Bull Rally Peaks At 1450

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Peter Lee, Chief Technical Analyst at UBS, was featured on Breakout yesterday with Jeff Macke and mentioned important technical levels to watch on the S&P 500 Index. He said if the S&P breaks below 1,250 support, stop loss executions will cause a "fast drop" to 1,120 or 1,150 (decent move, 8-10%). But even if that's the case, Lee sees one more rally in the S&P that peaks out between 1,440 and 1,450, which unfortunately concludes the cyclical bull market. I embedded the video after the jump, or watch it at Yahoo Finance.

The S&P closed at 1,254 yesterday and the S&P future is currently up 0.6% overnight. I threw some lines on a chart showing the levels to watch. If the S&P does fall to 1,120, will QE3 spark the rally to 1450?

More bulls:

  • Thomas Lee, Chief U.S. Equity Strategist at JP Morgan, "predicts a potential move of the S&P 500 toward 1400, an increase that he thinks will be fueled by industrials, basic materials, energy and tech." - July 25, 2011 (CNBC)
  • Deutsche Bank sees 15% upside potential for the the S&P 500 with a year end target of 1,550 - July 26, 2011 (Business Insider)