SPX At 3627

 The variety of directional market indicators I follow point positive for the SPX. But there are

 also signs that the market is high both on technical  and fundamental grounds. The SPX is

getting very overbought for the intermediate term, is quite overvalued, and is getting hyper-

extended when viewed on a very long term basis.  So, if you are trading or investing, be 

aware that you playing in a very effervescent and expensive market. The rapid acceleration

of Covid cases may well do more economic damage well into next year and could lead  to

some extensive volatility in the market. The news on the Covid vaccine front sounds terrific,

but even with high efficacy and broad distribution, the economy will take time to regain

solid footing. Even if SPX net per share were to hit new high ground of $200 by 2022,

  the market is hardly on the bargain table at an assumed p/e of 18.1x. Moreover, a

 broader and stronger economy by late next year may bring significant inflation

pressure and rising bond yields. These latter developments could crimp the market p/e

even if the Fed keeps short rates low to accomodate a move to fuller employment.

 

I am on the sideline now and it would take a substantial correction to get me interested in

a long side trade. I sure as hell did not see the "blue wave"  I was hoping for, and I think

the popular view of political gridlock will turn out to prove disappointing for the economy

and investors. If the Dems do not sweep the senate run-offs in Georgia, times could turn

very frustrating for a guy like me as I believe the economy needs a substantial overhaul

if the US is to do well in the years ahead.