After recovery from last year's low, stocks seen continuing rally into next year

Mark DeCambre at MarketWatch recalled how the S&P 500 hit a low on Christmas Eve last year.

“On Christmas Eve last year, the S&P 500 index had fallen nearly 20% for the year and was on the verge of a bear market,” DeCambre wrote. “But this year’s rally has seen the S&P 500 index recover and return 37% when the market closed for Christmas Eve on Tuesday.”

DeCambre noted that some analysts think that stocks could continue to climb higher into next year.

“The strength in long-term internal trends not only signifies an improving market but helps build a more sustainable backdrop as levels of technical support strengthen and multiply, creating more reasons to buy dips,” wrote Jeff DeGraaf, chairman of Renaissance Macro Research, in a Tuesday research note.

“In 2019, expanding valuations drove gains for stocks, but in 2020, we expect earnings to do the heavy lifting,” wrote John Lynch, Chief Investment Strategist for LPL Financial, in a note on Tuesday.

Indeed, BTIG’s chief equity and derivatives strategist Julian Emanuel believes stocks could surge another 22 percent next year.

“We think confidence will ultimately translate into the public getting this enthusiasm for stocks which could cause prices to move as high as 3,950,” he told CNBC on Monday.