SPY remains lofty heading into a crash

Markets remain lofty as always. Do they deserve this valuation? Well, let’s put it in perspective.

S&P Historical P/E Ratio 

Stocks are certainly frothy here. They’re not at the levels that we saw leading into the dotcom bubble, but that’s kind of a high bar. Historically, this is pretty elevated.

Most of this is being caused by Fed policy. I’ve seen estimates that we’d be 20% or lower if the Fed hadn’t flooded the money markets. That I would believe.

I’m trading the market in front of me, but with a very wary eye. Things could snap back quickly without warning. So, I’ll keep things close to the vest for now.

As with so many days prior, tech leads the way with sectors like healthcare lagging. This can go on much longer than you would expect. But, it will end at some point.

Twilio Inc (NYSE:TWLO) – This is a great chart to play long. The stock already showed it wanted to bounce off the 200-period moving average. Now it’s got the 13-period moving average over the 30-period moving average, making a consolidation pattern. It already showed strength today, and I think has further to run.