The bulls are attempting to outdo each other as often happens at or near market tops. But who’s to say this is a top?

Citing low analyst’s estimates, Morgan Stanley says Next S&P; 500 Move Is 10% Rally. The body of the story paints an even rosier story.

The direction for stocks is still up after the Standard & Poor’s 500 Index topped its previous closing high, according to Morgan Stanley chief U.S. equity strategist Adam Parker.

The next 10 percent move in the U.S. equities market will be higher as low analyst earnings forecasts, a rising economy and muted investor sentiment paves the way for further gains, Parker wrote in a note to clients on Monday.

“We can’t forecast the market multiple, but we can guess at the next 10 percent move,” Parker wrote in a note to clients. “Why sell the market when numbers are too low, the economy is improving, and you can still romanticize that you are a contrarian bull?”

Parker also argues that the U.S. economy is likely to be better in the second half of the year than in the first half, and that sentiment on equities is too low “despite the fact that the market is once again bumping against all-time highs.”

Parker said the bull market in American stocks can continue for another five years.

He forecasts the benchmark index will end the year at 2,275. That’s above the average of 2,232 in a Bloomberg survey of 21 strategists, which includes Parker, and implies a 6.7 percent rally from current levels.

Plenty of Room for More Optimism

Why stop with a 5-year rally? Why not 10 or 20 years? Another 5 years would make it a mere 15. Why not forever?

For starters, this Fed is a sure bet to end the business cycle. Isn’t it? And it goes without saying, there will never be another recession.

Apple and Google will soon be trillion dollar companies. Once that happens we can start discussing which company will be the first to top $2 trillion, then $10 trillion.

There’s plenty of room for more optimism, and this bull market won’t end until we see every ounce of it.

Mike “Mish” Shedlock