US dollar & S&P 500 correlation since the Covid bottom

 

Where's the market going? Follow the Dollar maybe...

QQQ 15 year chart

 

When it finally corrects, we could see more than a 30% drop from the top...

See how insignificant the 2007 top appears from here!

Y2K top compared to current highs...

Loong recovery time

September 2020 charts

Markets seemed to be at extreme levels as of the end of August, based on a number of metrics, but particularly the RSI, which had previously risen above the 70ish level only one time in June, since the March bottom. Of course we also saw those high RSI levels in Jan 2020 (coincidentally just before the Covid disaster).

Time will tell, but it could be that the post Labor Day rally is the new 'top' in the markets for now. This happened right afer the stock splits of AAPL & TSLA on Sep 1st. On Sep 3rd we saw the first big market drop. If this is in fact the start of a bigger drop, here are some charts of a few popular stocks that have seen big rallies in recent times, and some potential target levels. Target levels can be determined a number of ways, including the 50MA (or other moving average of your choice), and prior breakout/support levels. FAANGs Banks Others 

As this is being written, it is Fed day today, and tonight the market is selling off once again (below).

 

Best August since 1984, then...

 August 31 headline...

Then we get this 2 days later!

Valuations in the Covid era

A look at PEG ratios...

Not necessarily a good price indicator, but it offers you some comparisons.

DIS for example seems way overpriced based on this metric & the current economic growth situation.

In general, a PEG under 2 would be considered reasonable, based on growth projections.

Quick lookup here on FINVIZ  Also on Zacks (charts)

*(data below is only as accurate as what is shown on the site referenced)

Stock	PEG ratio
FAANGs	May 17	Aug
FB	1.9	2.0
AAPL	2.1	2.8
AMZN	3.4	4.2
NFLX	2.7	2.5
GOOGL	5.9	5.6
MSFT	2.1	2.4
Others in play
TSLA	No 'E'	5.7
SBUX	6.2	25
ZM	61.2	37
DOW stocks
CVX	8.0
XOM	1.5
DIS	84.2
KO	10.0, PEP 5.7
MCD	6.8
MMM	11.6
JNJ	4.9
PG	8.1
TRV	24.8
VZ	6.5
WMT	4.4

Followup...

Shortly after this was posted, we saw the Jun 2020 top.

Which was subsequently taken out however, as the market went even higher 6 weeks later.

Nothing on this site should be considered as financial advice.

Information is provided for education purposes only.

Corona Markets -week 2

Foreign markets have now pulled back to the Christmas 2018 lows...

Japan

 DAX

US markets...

We 'could' see a similar pullback over time...

On the bright side, maybe the gov't fiscal stimulus turns things around

  S&P

  DOW

  Small Caps 

-almost there

  Financials

  Energy

  

AMZN -holding up

The Techs have held up pretty well

  

SHOP -very strong

  

BA

  

F Ford 

We could see companies like this one go down...

  AAL -also in bad shape

...and others

Corona markets -Feb 25

Corona Markets

Foreign markets have pulled back to the highs of last July & September...

US markets...

We 'could' see a similar pullback over time...

The Corona thing was just a 'catalyst' for very extended markets.

So the pullback, if we get it, is really just a reset to more normal levels.

With any luck, we don't get there, and we turn around, leaving that green July line behind :)

Update -Looks like we could revisit our old friends around 3025ish 

The DOW & Russell 2000 are already there (July highs)...