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Christopher Lewis
S&P 500

The S&P 500 has rallied significantly during the week, breaking well above the 3000 level but you can see it did give back quite a bit of the gains as Thursday and Friday were a bit rough. At this point in time, it is likely that the market would continue to see a lot of noise so keep in mind that the market is likely to cause a lot of headaches more than anything else.

S&P 500 Video 01.06.20

I do think that the market is overvalued and quite frankly there is absolutely no reason for the stock market to be this high. However, most of what we are seeing is due to liquidity flows, meaning that the Federal Reserve pumping the markets full of cheap money is the most important thing to pay attention to. This has nothing to do with the economy, nor does it have anything to do with earnings.

Those things went by the wayside in 2008 as the Federal Reserve has continued to flood the markets with liquidity. That being said, there are a lot of concerns about the US/China trade war heating back up, so that might be the main problem with trying to short this market. That being said though, I think at the very least we need to pullback in order to build up the necessary momentum to continue going higher. Ultimately, we are at a major decision point so if we break above the top of the weekly candlestick, it is likely that we could go all the way back to the all-time highs.

For a look at all of today’s economic events, check out our economic calendar.

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