JPMorgan Sees S&P at 1100 by end of 2009

May 8 (Bloomberg) -- One of Wall Street’s most optimistic equity strategists told clients that the Standard & Poor’s 500 Index may rise even more than he expects this year.

“There is actually upside risk,” JPMorgan Chase & Co.’s Thomas J. Lee, wrote in a report yesterday. He expects the S&P 500 to end the year at 1,100, or 21 percent higher than yesterday’s close.

The CHART OF THE DAY shows how his estimate, which he has left unchanged all year, compares with the average projection of strategists in a Bloomberg survey. Lee is tied with David Bianco of UBS AG for the highest year-end number.

The S&P 500’s last close before Lehman Brothers Holdings Inc. filed for bankruptcy in September is included in the chart. Declines in share prices and the U.S. economy “snowballed” in the wake of the firm’s collapse, Lee wrote. “At that time, many would argue, stocks reflected a 2008/2009 recession.”

Stable retail sales, a pickup in pending home sales, and other indicators signal the recession may hit bottom by midyear, leading to higher share prices, the report said. The S&P 500 rose 34 percent from its March 9 low through May 8 yesterday’s close (exactly 2 months).

“We want to become ‘slow buyers’ of stocks,” he wrote, citing the likelihood that prices will drop below their March lows before rising anew. This so-called retest would serve as a trigger to buy “in a larger way.”
asr: what this analyst is saying they buy slowly at this already hiked S&P level and expects to test March low of 650 , once it touch March lows of S&P then they buy in a big way .
asr: who do not buy big way if S&P touch 650 which give 35% return on 650 to 890 , that is the precise reason why it won't fall down to 650 coz every body saw this 2 month pick from 650 to 890 so the very recent memory ( to peopel and fund managers ) of this quick spike won't let it fall to 650 ..