Dow to 22,000 by May? Price Headley Tells CNBC 'Yes'

If you thought the idea of the Dow Jones Industrial Average reaching 21,000 was amazing, try this on for size. BigTrends.com's chief analyst Price Headley has revised his target and timeframe in the meantime.... even more bullishly. He now expects the Dow to reach 22,000 by May of this year. That's up another 6% from its current level, and in addition to the 16% gain it's mustered since its early-February low.

And as it turns out, there's method to the apparent madness that isn't mad at all. As Headley explained to CNBC on Sunday, "Eleven straight gains in the Dow is historic. It doesn't happen very often. When you go back and look at what that kind of persistent buying power means for the future, it can be very bullish. You can go back to January of '87 (when) you know the markets kept running up until that market topped in August and then crashed after that. The bottom line is, it went up another +10% that year. It did the same thing again after December of 1970... that string of gains, we went up over 10% over the next three months. In '92 we flattened we flattened out for a few months before we ran up. So, I think it's reasonable to take the halfway point between that over the next three month outlook to say we can have a pretty chance of continuing this buying surge."

Part of the bulls' motivation is attributable to the expectation of clarity on President Donald Trump's planned tax reform, though a large part of this strength is rooted in garden variety momentum.  Headley told CNBC's 'The Rundown' host Akiko Fujita, "You've said it before - Trump's showing very low levels of popularity. This rally is happening in the face of all of this skepticism out there. I think that's incredibly bullish. As I said a couple of weeks ago, the wall that's already out there is not the wall with Mexico. It's the wall of worry, and that wall of worry is still there. We're not seeing any signs yet of any kind of speculative optimism."

Headley sees plenty of ways to take advantage of this wide swath of strength too. The BigTrends founder added "You could say that the Snapchat IPO coming out and they're not projected to make any money at all for the indefinite future - that might by a little bit of a concern. I wouldn't by that one. But, the bottom line is, I'd buy a lot of the other leaders in the financial sector, the banks, the tech stocks... there's just so much that's working. Even the stocks that were down before like healthcare are now starting to rally as well. So, you're getting a lot of participation here, and that tells me there's a lot more buying to come. "

Financial stocks are up a little more than 8% over the course of the past four trading weeks, while healthcare names have gained 6.3% for the same timeframe, working its way out of a bearish rut that turned painful in 2016. The only losing group for that period is the energy sector, but with oil knocking on the door of new 52-week highs, that tide could soon turn as well.

To see and hear the CNBC segment, go here.