Trivariate Research says the S&P 500 hits 8,000 when earnings grow fast. This counts as analysis now. Someone got paid to notice that stocks go up when companies make more money.
The firm wants you to stick with Micron and tech. Not because of charts. Not because of price action. Because earnings might increase at strong rates. You know what else increases at strong rates? The number of people who confuse a guess about the future with actual research.
Here's the thesis: when earnings increase good, market goes up good. Groundbreaking stuff. Really earning that research budget. Next they'll discover that when it rains people get wet.
They're bullish on Micron specifically. A memory chip company. In an industry where prices swing harder than a drunk guy at a wedding. But sure, let's call that a safe bet because someone ran a correlation on historical earnings growth.
The S&P at 8,000 represents a roughly 40% gain from current levels. Trivariate looked at past periods of strong earnings growth and decided this time won't be different. That phrase has never preceded a financial disaster.
Retail traders will read this headline and think they found the secret. They'll buy Micron calls expiring in three weeks. They'll tell their cousins about it at Thanksgiving. They'll check their phone every four minutes waiting for 8,000 to show up.
The charts say nothing about 8,000. Support and resistance don't care what Trivariate thinks. Trendlines didn't get the memo about strong earnings growth. But nobody wants to hear that price action matters more than some firm's wet dream about future multiples.
Trivariate Research believes in fundamentals the way children believe in Santa. The difference is children eventually grow up.
Photo by Ashley Piszek on Unsplash
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