Unprecedented Bullishness At 1929 Valuation Levels
What can possibly go wrong…..right?
Well, according to the bulls, not much. So much so that according to some this rocket ship is just taking off. Mind you, at Shiller’s Adjusted S&P P/E Ratio of 29.4. Now on par with 1929 top.
Consider the following news flow just from this morning.
Since 1945, there have been 27 years when the S&P has achieved gains in January and February. The stock index then finished up for the year (on a total-return basis) in every one those years, according to Stovall. That’s going 27 for 27, or batting a thousand.
Sounds like a sure bet to me.
Beyond technical targets, the February rally punctuates a second directionally sharp breakout, building on the late-2016 spike to record territory. Though near-term extended, the S&P 500’s intermediate-term path of least resistance points firmly higher.
Well, who am I to suggest that you probably shouldn’t chase this rally at today’s record breaking valuations levels. Who knows. Maybe the analysis above is correct and this bull market is just getting started.
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