The batch marketplace could spin reduce before ascent a high rally.

Christmas Eve was a nightmare for stocks, with a SP 500 (^GSPC) acrobatics 19% from a 2018 to a shutting low of 2,351.

On Friday, a SP was trade during around 2,580.

Unfortunately, we competence be headed behind to a 2018 lows again in 2019, according to Fundstrat’s Tom Lee

“In short, we trust that a pile-up of 2018 mirrors a mid-life predicament seen during a center of longhorn markets a la 1962 and 1987 and in both bases, a longhorn marketplace found a balance during a 200-week relocating average,” Lee wrote in a note to clients. “That is now [SP 500] 2,350 or so. And both midlife crises saw a retest during that level. Is a retest in 2019 possible? Yes, though if so, we would perspective that as a shopping opportunity.”

Retests are staples of marketplace selloffs. After all, before to a Dec 2018 meltdown in stocks, a marketplace plunged in Feb and October. In both cases, a SP 500 retested a low in a following weeks. The marketplace has nonetheless to revisit a Dec. 24 dip.

Meanwhile, Lee is bullish on bonds in 2019 and expects a SP 500 to finish 2019 during 2,850.

That represents about 10.5% upside from a index’s stream turn of 2,580.

From 2,351, Lee’s aim equates to a 21% surge.

There are a few elemental themes set to expostulate upside for stocks, according to Lee.

First, Lee is bullish on FANG bonds – that is, Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOGL). FANG, Lee said, historically performs good during peculiar series years.

Demographics might also boost a batch market. Millennials expostulate over 50% of GDP growth, according to Lee. The bonds Lee sees levered to this conspirator embody Tesla (TSLA), PayPal (PYPL) and Square (SQ), among others.

Lee is also overweight on bonds that advantage from automation and synthetic intelligence. Included in this prolonged list are Nvidia (NVDA), Amazon, Kohl’s (KSS), and Dollar General (DG), among others.

The dual vital downside marketplace risks Lee sees embody a probable executive bank process error, that has historically led to a high decrease in stocks.

Plus, a inversion of a produce bend — particularly a 10y/2y or a 30y/10y — is another large risk for stocks.

“Fortunately, conjunction is inverted yet,” he wrote.

Scott Gamm is a contributor during Yahoo Finance. Follow him on Twitter @ScottGamm.

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More from Scott:

The universe is on an ‘irreversible trail to an mercantile downturn’: Nomura

The years of easy income in a batch marketplace are entrance to an end

These 2 army could prompt companies to cut collateral expenditures

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