U.S. Stock Market Will Experience Near-Term Volatility Before Year-End Rally, Ned Davis Forecasts

According to Ned Davis Research strategist Ed Clissold on July 13, the U.S. stock market will likely experience near-term volatility before rallying through year-end. Clissold noted the S&P 500 has declined less than 1% from recent highs and remains approximately 8% above its 200-day moving average, indicating the long-term uptrend is intact.

The strategist's technical analysis shows the S&P 500 Cycle Composite suggests continued volatility through mid-August, followed by a potential pullback in early October, then a resumption of strength into year-end. Ned Davis's asset allocation model recommends a 70% stock weighting as of end-June, its highest level in four years, paired with 25% bonds and 5% cash.