Markets continue to test the upper resistance levels and then eventually break through. We are testing 4300 on the SP500. It can move past 4350 to 4375 if it can stay above 4275.
The markets are being propelled with stimulus money, interest rates reversing and staying low, and the anticipation of inflation being transitory.
Fundamentally we are stretched according to valuations. However, investors do not perceive risk. We can have a pullback of 3% to 5% at any time. But unless we have a change in investor attitude, then a big move down is not immediate. If we stay above the 4200 level, declines should be short-lived.
July is usually a good month for the markets, so use pullbacks as opportunities. After July, we may be looking at more significant pullbacks, and next year, we can shift in risk sentiment.
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