The S&P 500 is getting extremely close to the top of the megaphone pattern. There is little to no breadth in the market with Apple, Tesla, Nvidia, Amazon, and a few others keeping this market afloat. Here are some things to think about before everyone gets excited about new all time highs.
1. Schiller PE Ratio: 31.69
2. Price to Sales Ratio: 2.44
3. Buffet Indicator: 131.4%
4. Unemployment Rate: 10%
5. GDP: -34%
Valuations are absurd right now and anyone who thinks otherwise is ignoring the fact that we are in a huge bubble.
Now with all of this horrible data, the market continues to rally. There is simply too much liquidity being pumped into the markets from the Feds and retail investors to bring it down. Any positive news about Covid or a vaccine tends to prop up the market even further. I do expect a pullback of 10%-15% at a minimum but not a full blown crash again. I think a pullback to 3150 would be appropriate considering the massive rally it has had and present an excellent opportunity to pick up some long positions (especially if the Feds shit their pants and dump more money into the economy). I then expect a rally back up until the November elections.
As always, I am not a financial advisor and this is not financial advice. Do your own research and formulate your own theories. Make sure you have your stop losses set and mitigate the risk. We are at extreme levels right now and you don't want to get burned. Good Luck!
1. Schiller PE Ratio: 31.69
2. Price to Sales Ratio: 2.44
3. Buffet Indicator: 131.4%
4. Unemployment Rate: 10%
5. GDP: -34%
Valuations are absurd right now and anyone who thinks otherwise is ignoring the fact that we are in a huge bubble.
Now with all of this horrible data, the market continues to rally. There is simply too much liquidity being pumped into the markets from the Feds and retail investors to bring it down. Any positive news about Covid or a vaccine tends to prop up the market even further. I do expect a pullback of 10%-15% at a minimum but not a full blown crash again. I think a pullback to 3150 would be appropriate considering the massive rally it has had and present an excellent opportunity to pick up some long positions (especially if the Feds shit their pants and dump more money into the economy). I then expect a rally back up until the November elections.
As always, I am not a financial advisor and this is not financial advice. Do your own research and formulate your own theories. Make sure you have your stop losses set and mitigate the risk. We are at extreme levels right now and you don't want to get burned. Good Luck!