Veteran technician drops perfect metaphor, forecast for this market

Investors have struggled to ride the proverbial “wall of worry” to record highs on the stock market.

Buffeted by the volatility that followed President Donald Trump's “Liberation Day” tariff announcement – and with continuing uncertainty about tax levies on imports – investors have been fighting a case of the nerves, struggling to trust the rally even as the numbers say they should.

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As the Standard & Poor’s 500 reached a record high closing level July 17 and the technology-heavy Nasdaq Composite registered its tenth record close of the year, the American Association of Individual Investors was reporting increasing pessimism among individual investors about the short-term outlook for equities.

Optimism and neutral sentiment, meanwhile, waned.

In these conditions, longtime market observers have struggled to find a parallel to today’s market. They can point to the 1970s as a time of high inflation and interest rates, but the economic underpinnings were much different then.

And while there is plenty of mention of the last time the U.S. set import levies this high, those days of the Smoot-Hawley Tariffs were about a century ago, and no investor alive today recollects the market sentiment as the Roaring 20s came to a halt.

Without being able to draw on a true market parallel, investors are flailing, unsatisfied with analogies and metaphors that have fallen short amid whipsaw headline risks.

Amid that uncertainty, a veteran technical analyst's forecast for market results this year hasn’t wavered or changed, even in the face of the April headlines and correction. He has seen his prediction not only hold up, but also deliver a flawless metaphor for the market’s action in the first half of 2025.

An investment strategist uses a creative metaphor for the current state of the market.

Image source: Michael M. Santiago/Getty Images

The market’s action in 2025 defines ‘clear-air turbulence’

Mariner Wealth Advisors Chief Investment Strategist Jeff Krumpelman entered 2025 with a forecast of the Standard & Poor’s 500 ending the year at or near $6,600, and with a theme that investors would live through “clear-air turbulence.”

Clear-air turbulence is an aviation term, and while Krumpelman is neither a pilot nor an aviator, he said on the Money Life with Chuck Jaffe podcast that “it perfectly describes what's happened this year.”

The U.S. Federal Aviation Administration (FAA) defines clear-air turbulence as sudden and severe air disturbances occurring in cloudless skies or between and among non-threatening cloud patterns that result in violent buffeting of aircraft. It is a higher-altitude phenomenon – typically occurring above 15,000 feet – that can drop a plane hundreds of feet in seconds.

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Sometimes called “air pockets,” these bumps are hard to avoid because they are not visible in clear-air conditions.

Krumpelman said that for all of the anxiety over the headlines, the economy is showing “clear blue sky hard-data fundamentals.”

“And yet, you've got policy concerns and speculation about it that have caused us to hit these air pockets,” Krumpelman said.

“Through good pilot navigation and communication, you climb back to your original altitude and you get to your destination, you get your decent returns, but boy are you white-knuckled and you kiss the ground when you get there.”

The stock market was struggling against headwinds after peaking in mid-February, but it hit an air pocket with Liberation Day on April 2, losing more than 12% of its value in six trading days.

The path to S&P 6,600 by year’s end

Krumpelman says that while market reactions to subsequent tariff announcements have become increasingly muted, he sees more turbulence ahead, even as the market has recaptured record-breaking levels and is poised for more.

Krumpelman says that the clear-air turbulence theme helped him and Mariner – which managed roughly $250 billion in assets – stay the course on the forecast with which they entered the year.

He noted that a majority of financial firms “have changed their price targets and their odds of recession time and again. They were bullish going into the year. They turned bearish around April. Then they turned bullish again….It can actually cause wealth destruction. It can cause premature selling activity, and it's just not helpful.

“We've had a consistent message. It's been psychology and psychiatry that has caused [price/earnings ratios] to go from 22 to 18 back to 22,” he added. “P/E volatility is self-correcting if the data remains solid. And I'm not going to sit here and tell you that absolutely, we know with 100% certainty that this data is going to continue to trend in a positive direction but…the data is solid.”

When the market sells against solid market data, Krumpelman says he sits tight.

He has held his ground on 6,600 based on an assumed price/earnings level that he considers reasonable.

“And if everything is moving forward and it looks like earnings are going to continue to progress, margins are going to hold up, interest rates are going to stay at reasonable levels, we'll have a higher earnings figure 12 months from now,” Krumpelman said on the July 18 edition of Money Life. “And we could be above 7,000 12 months forward.”

Krumpelman noted that the firm is always looking one year out and puts a 60 to 65% probability on the 6,600-7,000 range within 12 months, with a 30% chance that “the market goes nowhere.”

Krumpelman said this would happen with “continued, changing mixed news on tariffs that do drive inflation up just a little bit, that do slow things down, that have lingering impacts on CEO confidence, [making for] earnings that are just a little bit lighter than anticipated, and P/Es a little bit lighter. That takes us to nowhere over the next 12 months.”

Krumpelman noted that what is not in the forecast for the next 12 months is a recession, because “it’s just not in the data.”