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A Technical and Fundamental Perspective

Posted: Mar 22, 2016 11:31:09 AM

The markets are technically overbought in the short term.  In addition, they are fundamentally overvalued.   As of yesterday’s close, the S&P was overbought according to Granite Group’s technical indicators.

Fundamentally, the S&P is trading at 17 times 2016 earnings which is well above the historical averages. At this juncture, you should be cautious with additional equity investments.  At the current market multiple,  we do not see a huge upside. As we have said before, there will definitely be more volatility, but also better entry points and opportunities.  On a slightly longer-term view , the S&P is trading at 15 times 2017 earnings.  Assuming the current projections for 2017 are accurate, then it is possible for a slightly higher S&P in 2017.

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