Options guru Jared Woodard of Condor Options compares the year-end 2014 S&P 500 price targets of Wall Street strategists to the forward range for the index in 2014 implied by the options market in the chart below.
“Neutral is the new bearish,” says Woodard.
“The minimum estimate in this survey [of Wall Street strategists] has the S&P 500 at 1850, which would still be a gain for the year. Compare the bar for 2013, where the median target was also positive (light green dot) but there were still some actual bears.”
In 2013, the market finished significantly higher than either Wall Street strategists or options traders predicted at the beginning of the year.
As of Friday’s close, the S&P 500 stands at 1838 — less than 1% from the Street’s median year-end target.