The Fragile Foundation of the US Stock Market Rally
The recent breach of the 20% level from the October lows for S&P 500 is still a bear market rally, and not the beginning of a new bull market. The market is not priced for a recession, and there are signs that we are already in a recession. The narrow AI themed rally can only take the stock market higher for a limited time, other stocks must join in - the rally must broaden. The Fed is likely to cap the bear market rally by continuing to tighten monetary policy until the data confirms a recession. It makes sense to sell SPY or alternatively, T-Bill are yielding over 5%.