Big market surprise coming in 2013

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Can the bull market in equities continue at pace in the New Year?

Optimism reigns in some quarters, despite a lot of current uncertainty abroad and especially at home, as the Fiscal Cliff drama plays out. It seems like a good idea to ring in the year with a dose of feel-good prognostication, for which I turn to the esteemed veteran strategist Lazlo Birinyi.

He is "sticking to the bullish forecast he has given to clients of his Westport, Connecticut-based research firm since stocks hit a 12- year low following the credit crisis four years ago. The 69- year-old money manager says the bull market that began in March 2009 resembles advances that pushed equities up more than threefold in the 1980s and fourfold in the 1990s," notes Bloomberg.

"The Standard & Poor's 500 Index will probably surpass its record high in 2013 as bears capitulate and the lure of a four-year bull market pulls 'everyone in the pool.' "

His most interesting prediction is that the retail sector will have a change of heart about the stock market, giving up its recent reluctance and fear of rigged-systems to once again resume its traditional role as a big buyer of stocks.

At some point, I too expect the retail sector to rotate back into equities. But it's hard to make the case for early 2013. That said, nothing will break down retail investors' fears of market structure inequities quite like massive returns. If the bull continues to run, they will come back.

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