Markets rise, new market highs “a real possibility”

Markets rose on Tuesday.

The S&P 500 rose 1.2 percent, the STOXX Europe 600 rose 1.1 percent and the Nikkei 225 surged 2.6 percent.

The S&P 500 briefly moved above its 200-day moving average on Tuesday but failed to hold that level.

“In the first attempt to get above the 200-day, the bears made a stand,” said Scott Redler, partner with T3Live.com.

Still, some analysts see a good chance of a more sustained move over the 200-day moving average.

“Maybe you spend a couple months not making much progress, but as long as investors are as defensive as they are, I wouldn’t get too negative,” said Chris Verrone, Strategas head of technical strategy.

“Week by week, the active bulls are proving more powerful than the active bears,” suggested Redler.

“The underlying trend is still pretty healthy,” said Robert Sluymer, Fundstrat technical analyst.

Wharton School professor Jeremy Siegel told CNBC on Tuesday that new stock market highs this year is “a real possibility”.

Even Mohamed El-Erian, the chief economic advisor at Allianz who had warned of dire economic and market consequences from the coronavirus in early February, has become more optimistic.

“It’s not just stocks. It’s other risk assets. It’s fixed income. It’s currencies, and it’s commodities,” he said. “So it’s really good to see an across the board risk-on tone, which we haven’t had really for quite a while.”