August 3, 2017

Let's Talk US Markets (QQQ and SPY)

The US market is on fire!

- SPY is up 10% YTD and QQQ is up 19% YTD!
- President Trump can't stop talking about the monster market gains and tweeted more about it in the last few weeks than he has since he took office: https://twitter.com/realDonaldTrump
- CAPE Shiller PE ratio is in record territory not seen since the Dotcom Bubble: http://www.multpl.com/shiller-pe/
- Over 70% S&P500 companies topped Wall Street estimates regarding revenues AND earnings: https://www.cnbc.com/2017/07/31/us-stocks-earnings-season.html
- The Atlanta Fed said the US economy expanded at a totally unexpected and gigantic pace of 4% in Q2 2017: https://www.reuters.com/article/us-usa-economy-atlantafed-idUSKCN18C20T

But the US market is way overbought/extended!

- SPY hasn't touched the weekly moving average in months!
- SPY has gone straight up since the Feb 2016 low, returning a whopping 27%!
- VIX is at a freaking 23 year low: https://www.reuters.com/article/us-usa-stocks-volatility-idUSKBN1AA205

What on Earth do you do with this insane situation? Bulls have a massive case. Bears have a massive case. Who is likely to win??

Let's talk about it in more detail in my next post.

Jory




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