I don’t know about you, but I’m sick of hearing all the bad news on Wall Street. We’re being smacked around by the same old litany of reasons the market is in trouble: Falling home prices, continuing sub-prime write-offs, dazed consumers, high oil prices, the upcoming hurricane season, geo-political risks – the list goes on and on. The bears are probably right about all those factors, but they’ve overlooked one important thing: The stock market is headed for a breakout.

I’ll admit that the S&P 500 is putting up more resistance than I expected at the 1420 level. BUT! There’s the little matter of $4 trillion in cash on the sidelines, in institutional and individual money market funds and brokerage accounts. We have record short selling and put buying. Once the S&P breaks out over 1440 – and it will – the stock market will head for a record close in a hurry. We could see a 1991-style run-up of 20% in 22 trading days. It will bankrupt most shorts, but beyond that, there’s a decent chance of a parabolic move up to 2200 by next April 23. I’m seeing signs of that emerging from all directions.

Generally, resistance occurs when sellers outnumber buyers and clearly that’s what we’re seeing now. With oil prices striking new highs at an almost daily pace, investors sell-off in the broad market because of a pervasive fear about the inflated energy costs consumers and businesses will have to face. It should come as no surprise that stocks are continuing their dance to the tune of up, down and all around. After all, the current economic reality – predicated by rising oil prices, an ill-stricken housing market, a credit crunch and inflation – makes it challenging for investors to assemble enough positive sentiment to vault over current resistance levels.

But instead of fretting the negative, why not follow the stock market’s lead? At the moment, the market is lifting off the March 17 bottom in what is shaping up to look like a parabolic upturn (similar to tech stocks in 1999). Obviously, we won’t know how the stock market will respond until it…well, responds! The S&P 500 could fail at 1440 and then break all the support levels down to 1270.

If that proves to be the case, then the bears have won. But I’m confident that this won’t be the case and the stock market will grind its way towards the 1440 level on the S&P, dip back to the 1395 support level, consolidate and then break through to the old highs at 1555, and then head higher into next April. No investor can afford to miss out on this tremendous buying opportunity!

As comedian Marty Allen said, “A study of economics usually reveals that the best time to buy anything is last year.” Well, folks, by this time next year I hope you’re not saying the same thing. A breakout is pending; the time to buy is now.

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