One of Wall Street's biggest bulls expects the stock market to suffer a sizable correction this year for the first time since 2011. But not before the Standard & Poor's 500 index climbs closer to 2000, or 8% higher than Wednesday's record close of 1848.38. In a report titled, "A Hop, A Drop and A Pop In 2014," Craig Johnson , managing director at Piper Jaffray , says the primary trend of the stock market is still up despite a slow start to the year. Many pundits are calling for a correction soon. But Johnson says a short-term top will take more time to form. The market-timing gauges he tracks, including market-leadership gauges and the number of stocks going up vs. those going down, are not signaling a correction is imminent. Instead, he's calling for a resurgence of the bull, with the S&P 500 grinding its way up to his price target of 2000 (a hop). That rally, he says, will be followed by a drop of roughly 17% to 20% to 1600 or 1650, a level that has acted as a key price floor for the benchmark index in the past 12 years. After the pullback, Johnson predicts, the stock market will roar back and resume its uptrend and finish the year with a pop that will power the S&P 500 to a new record of 2100. "We reiterate our bullish outlook for stocks, but we believe 2014 will be a more volatile year," Johnson says. Stocks, he says, often run into trouble in midterm election years and the first few months after leadership changes at the Federal Reserve.
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