The Federal Reserve Bank promised that interest rates will stay on an extremely low level, company profits are rising (fueled by efficiency gains) and the consumer spending, the engine of the economy, is steadily climbing.
And paradoxically there is another tailwind - the still negative sentiment of the market. The majority, including the gross of hedge funds, is still too pessimistic and underinvested. Many professional investors (fund managers et.al.) are sitting on high cash reserves. I believe that those bears will get again punished by solid economy numbers that lead to stock market gains. Many professional will feel a growing performance pressure.
Hence I expect that the rally has legs and will drive the S&P 500 beyond the mark 2,000 by the end of the next year. I also believe that the advances in Internet, mobile computing, 3-d-printing, robotics, nano- & biotechnology and other fields (= technological progress) are reducing costs, raising efficiency and creating new markets. And the catching-up process in China, India and a lot of other countries will translate into high growth in large parts of the global economy that creates continuously rising revenues & profits for global companies like Starbucks, IBM, Caterpillar and other members of the S&P 500. Both trends will keep the bull market alive for many years.
The named beneficial factors could induce yearly stock market gains of 15% on average. Thanks to the compound interest effect the S&P 500 could double again between 2014 and 2019 and could reach the mark 4,000 already in this decade.
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