US stocks are squatting deeply before jumping? Castle Securities: S&P 500 is expected to hit 7000 points by the end of the year.

Citadel Securities stock and stock derivatives strategist Scott Rubner predicts that after a round of "healthy" pullback, the S&P 500 index will experience a strong rebound, with the index possibly reaching 7000 points by the end of the year. According to this strategist, the momentum for growth comes from a combination of market positioning and favorable seasonal factors. Rubner's analysis suggests that the recent market pullback has created favorable conditions for a strong recovery, with various bullish factors expected to drive stock prices higher in the coming months. These positive drivers include continued demand from retail traders and a decrease in institutional investor positions before the Thanksgiving holiday, giving these large investors more room to readjust their holdings. Rubner believes that NVIDIA Corporation's strong performance is likely to prompt traders to unwind hedge positions and re-establish their positions by year-end. He also adds that historical data strongly supports the view of a year-end stock market rally. Records from 1928 show that the S&P 500 index usually rises by about 4% from the current period to the end of the year, highlighting the favorable seasonal trend. Systematic investors who use quantitative models, big data analysis, and algorithm-driven strategies for investment are an important group that Rubner closely monitors, as they have "clearly entered a risk-averse stage" and reduced their stock holdings during the recent market weakness period. According to the strategist, these automated fund outflows may continue in large volumes in the coming days before tapering off, which could potentially alleviate selling pressure in the market. Citadel Securities continues to observe strong retail participation, with fund flows "clearly favoring the buy side" over the past four weeks. Rubner wrote, "In the recent market volatility, retail investors have shown remarkable resilience, and they are still seen as 'one of the most important sources of demand by 2025'." The strategist also notes some signs indicating that investors' stock allocations are extending beyond this year's market leaders. While technology stocks (XLK.US), communication services stocks (XLC.US), and utilities stocks (XLU.US) have shown the most significant gains so far this year, recent performance suggests that market leadership is shifting towards healthcare stocks (XLV.US), energy stocks (XLE.US), and consumer staples stocks (XLP.US), reflecting a move towards a more "diversified" investment strategy after months of concentrated investments in the market's biggest winners.