Goldman Sachs says US stocks have more room to rally if two conditions are met--more central bank stimulus--which is playing out with Fed on edge of more easing this week, and positive US data. Goldman notes that in the fall of 2010 and 2011, the S&P 500 stock index added over 340 points. "In both cases, two ingredients were necessary: positive US growth surprises; and major central bank easing," the bank says. Of course, some factors could derail the rally, among them the US fiscal cliff, says Goldman. "But until the major players and their positions become more concrete, we suspect that the market is more likely to trade what it can see in the more immediate future," it says, citing the steepness of the VIX futures strip still suggests that the market is not overly complacent about the future.
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