Consumer confidence helped boost the market up today. However, the Baltic Dry Index is still clearly in a down trend as seen in this chart:
This should signal that commodities prices are headed lower, and with lower oil, you expect the the large cap oil services stocks to start dragging down the rest of the market.
I am a little concerned that anytime we get any sizeable pullback, all these fund managers that missed the rally are stepping-in and buying the dips. I think they're setting us up for a nastier pullback this fall than we otherwise would have had.
Putting a 20 multiple on earnings, I'd say fair value for the S&P is around 880. When people finally realize that, this market is going to get ugly fast. But for now, it looks like we're going to continue to drift higher.
Disclosure:
At the time of this writing, I had no position in any of the stocks mentioned.
This should signal that commodities prices are headed lower, and with lower oil, you expect the the large cap oil services stocks to start dragging down the rest of the market.I am a little concerned that anytime we get any sizeable pullback, all these fund managers that missed the rally are stepping-in and buying the dips. I think they're setting us up for a nastier pullback this fall than we otherwise would have had.
Putting a 20 multiple on earnings, I'd say fair value for the S&P is around 880. When people finally realize that, this market is going to get ugly fast. But for now, it looks like we're going to continue to drift higher.
Disclosure:
At the time of this writing, I had no position in any of the stocks mentioned.
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