S&P 500 Poised for Strong Rally This Year According to Strategist Craig Johnson

The S&P 500 is set up for a strong rally by the end of the year, as stocks are flashing signs of being oversold, according to Piper Sandler strategist Craig Johnson.

Johnson pointed to various indicators that suggest the S&P 500 is oversold, like deteriorating breadth and overbought-oversold oscillators.

Other contrarian indicators, like the Bull and Bear Indicator and the VIX, also suggest the market is in a trough.

Once clarity comes on issues like earnings, interest rates, and politics, Johnson sees a "meaningful pop" in stocks.

Markets expect the Fed to stop hiking rates soon, which could ease bond yields.

Of S&P 500 companies reporting earnings so far, most have exceeded expectations.