S&P to 1330+ by Christmas, Says Expert Market Adviser

Tom DeMark is good at what he does.

DeMark advises some of the greatest investors of our time like George Soros' Fund Management and Steven Cohen's SAC Capital Advisors LP.

He is the creator of indicators to show turning points in securities. He makes a living simply by offering investment advice.

In turn, many of the large institutions he's advising often make large sums of money.

His system of signals can be difficult to understand to most investors, but it has proven to be effective and profitable...

So when DeMark told Bloomberg News (video below) that his system signaled "the strongest buy sign" in 40 years over this past Thanksgiving week, people's ears perked up.

According to DeMark, the Standard & Poor's 500 Index (SPX) may advance to somewhere in between 1,330 and 1,345 this month before the rally reserves.

Bloomberg reports:

That would represent a rise of at least 5.8 percent for the benchmark gauge for American equities after the worst Thanksgiving-week drop since 1932 depleted sellers, said DeMark, whose prediction in September that the S&P 500’s decline would stop at 1,076 proved prescient when the index bottomed at 1,074.77 on Oct. 4. This month’s rally will end when the S&P 500 closes higher on four successive days, DeMark said.

“I had the strongest short-term buy signal I’ve recorded in 40 years” during the week of Thanksgiving, which fell Nov. 24, said DeMark, the founder of Market Studies LLC, in a phone interview. “It’d be an explosive move to the upside.”

Last week, the S&P 500 posted the biggest gain since March 2009 — rising 7.4% after six central banks made it easier for lenders to obtain U.S. dollars in emergencies. On top of that, a report showed the American jobless rate dropped to 8.6% from 9%.

These are all factors in DeMark's system predicting a major surge within the S&P.

On Monday the S&P 500 rose 1% to 1,257.08 after Italy's Mario Monti proposed budget cuts while Germany and France pushed for a new EU treaty to fight the debt crisis.

“The market should top out around Dec. 21,” he said. “The market rhythm and market balance equilibrium all require the market rally. Once that's completed the market will have a vacuum on the downside and we should have a sharp decline.”

DeMark, who has spent more than 40 years developing indicators with names like “sequential” and “countdown,” said on Oct. 25 that a rally by the S&P 500 above 1,254 would “trap” bulls. The index peaked three days later, then dropped 9.8 percent through Nov. 25.

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