I Got 10 Hive On SPY Hitting 344, Before Hitting 330...Who Got Next???
We had a great conversation during the Leo Podcast this past weekend. One of the topics included whether the S&P 500 was going to see new highs or a correction first. There are growing concerns about stocks have continued to move higher, while over 30 million people are out of work.
According to FactSet analyst Marc Evans, profits for the companies in the S&P 500 fell more than 30% in the second quarter, according to FactSet analyst Marc Evans, the worst drop in five years. And sales fell almost 9%, the biggest decline in nearly four years.
The S&P 500, a measure of the 500 largest listed companies in the U.S., is trading at levels not seen since the dot-com bubble in 2000. Stocks are trading at forward earnings multiples unseen since the tech bubble of 2020.
Fed Chair Jerome Powell directed the central bank to buy up corporate bonds and ETFs, flooding financial markets with liquidity and expanding the Fed balance sheet to around $7 trillion – which is a little over $1,000 for every person on earth.
In a less sophisticated economy, this money printing would have caused runaway inflation, as we see in places like Venezuela, Zimbabwe, and Lebanon. U.S. financial markets are insulated away from the regular economy, so this hasn’t happened.
However, despite all this, Michael Santoli posted on Twitter that the National Association of Active Investment Managers are long the equity markets by more than 100%. Market sentiment is extremely optimistic with stocks likely in overbought territory. But haven't you ever heard of some being overbought can stay overbought?
But just like 2000, the S&P 500 and Nasdaq may be trading near all-time highs, with just a few stocks leading the charge: Apple, ,Microsoft, Amazon, Google, Alphabet and Facebook now account for almost a quarter of the entire market cap of the S&P 500.
But I keep seeing this rotation into small-caps and cyclicals which have lagged, but are surging in the first couple of weeks in August. If this continues, for sure I win the bet.
With all that said, lets get into the bet I put on with @nealmcspadden. Because the Feds has everyone and their grandmother's back, the SPY hits 344 before hit it 330.
If price starts moving against me, my offensive line becomes the 4 Hr demand at $331.50.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advice. Do your own research before making investment decisions.
Posted Using LeoFinance
