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Real Time Insight

The S&P is within arm's reach of its highest level in more than 5 years. Following a fiscal cliff deal, the index soared and eventually hit an intraday high of 1468 on January 4, coming within 7 points of its 5-year high of 1475 on September 14, 2012 (which is its highest level since 12/31/07). But this proved to be a bit of a resistance level as the market has retreated a bit since then, as you can see in this chart below:

So what do you think it will take to finally propel the S&P 500 to new multi-year highs?

A. A solid Q4 earnings season
B. Better-than-expected economic data
C. No catalyst needed. We're just pausing before the breakout.
D. It won't break out... at least not anytime soon.

My vote is for 'D'. I just don't see us breaking out to new multi-year highs without a strong earnings season. And as Sheraz Mian, Director of Research at Zacks, recently wrote, Q4 earnings growth is expected to be flat year-over-year, but full year 2013 earnings are still expected to grow by double-digits. I think these rosy projections will come down significantly after this earnings season, and that will hold the S&P back from reaching new highs.

What do you think? Chime in below.

Zacks Releases Their 7 Best Stocks for August, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new Zacks.com visitors free of charge.

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