If you look under the fluff, one can see the forces pulling between a return to economic Recovery and a Recession. For instance The Chicago Economic activity index today showed a negative number for September.
Bottom line, 10 year interest rates are the ones doing the debate between Recovery and Recession. Stocks are ignoring everything, rates and valuation metrics mean nothing, they are just pushing the tail of the Free Fed Money.
This means stock indexes are quite excited and heading higher for the moment, led by Tech into this weeks Tech earnings.
And yet the FANG chart, for chartists, looks like a head and shoulders top. The 21 day average declined through the 50 day average recently. Here is the FANG chart updated at noon today CDT.
Also money is moving out of the US to foreign stocks, Britian, EU, even China as US Valuations get more stretched.
Adding to the issues, over the past three days it appears GOLD has come out of its long slumber, does this indicate peak economic concern or is it something else? Here is a fun chart that kind of brings it all together, The FANG Index divided by GOLD. You get to mix the euphoria of tech with the old standby of base value, GOLD.
And maybe most importantly the much hated dollar strength since last December is holding its own and the trend on the 10 year interest rate is still headed higher.
So my view is definitely contrarian and being tested this week. But in the end I still believe the MACRO will win out and I would not be surprised to see the tax implications of the infrastructure bill being a factor.