Value Line’s gradual lift shows why worry about SPX being overbought or overvalued is likely misplaced

ATTENTION: As I am out of town, I will unfortunately not be able to write a technical report Thursday (3/14) or Friday (3/15) this week.

I continue to see the US stock market as being attractive, technically speaking, and do not feel sufficient risk is there to warrant a selloff at this time. While momentum gauges like RSI have gotten overbought, there remain precious little other evidence with regards to frothy speculation to excessive valuation measures that would warrant a major selloff.  Powell’s recent dovishness likely won’t change too dramatically despite a second “hot” CPI reading, and it appears like bounces in US Dollar and Treasury yields could prove short-lived before weakness back to new monthly lows into this Summer.  Rallies up to SPX-5250-5300 look possible ahead of a possible late March pullback into April.  However, without any evidence of this, it pays to wait for signs of weakening breadth and/or momentum before expecting a selloff of any sort.


Wednesday’s trading proved to be nearly the complete opposite of what was shown in Tuesday’s trading.  While Technology fell more than 1% to cause $SPX and $QQQ to finish negative, the broader market fared much better.  Eight sectors finished positive on an Equal-weighted basis.

checkout-thomas-lee image
checkout-logo image

Become a Member To Access Fundstrat Research

Fundstrat Direct gives individual investors access to Tom Lee's research, previously only available to banks and hedge funds.

Monthly

$199/mo

First Month Free

Join Now

Annual

-15% $2,028/yr

List Price $2,388

Savings: $360/yr

Join Now

Why Join Fundstrat Direct?

Fundstrat Direct helps you invest confidently with the same research banks and hedge funds use to navigate the market.

Daily Strategy Icon

Daily Strategy from Tom Lee & Team

Stay ahead of consensus with daily updates on key developments & catalysts and opportunities ahead.

Real-Time Market Alerts Icon

Real-Time Market Alerts

Analysis on market-moving events and actionable opportunities delivered instantly from us to you.

Curated Stock Lists Icon

Curated Stock Lists

Choose the portfolio that best suits your investment style, preferred asset class, and time horizon.

Monthly Market Update & Top Ideas Webinar Icon

Monthly Market Update & Top Ideas Webinar

Attend engaging webinars with Tom & team featuring our top ideas and near-term market outlook.

Daily Technical Strategy Icon

Daily Technical Strategy

Receive tactical opportunities, actionable signals, and fundamental analysis from our proven research team.

Live Analysis on Your Holdings Icon

Live Analysis on Your Holdings

A monthly webinar featuring live analysis on member-submitted stocks and questions.

Disclosures (show)

Events

Trending tickers in our research