We have reached full employment, market overvalued and new President....market at all times! We have topped!
In the NYSE there are only a few stocks that are holding up the indexes, Dow Jones Industrials Average (DJIA), the S&P 500 Index and the Nasdaq 100 Index. Ten or fifteen big cap tech stocks like Facebook (FB), Amazon (AMZN), Apple (AAPL), Google (GOOG). The assumption is that all of those stocks are going to continue to grow forever, getting bigger and bigger. Maybe some of them will but looking back at history that is rarely the case. Nothing really goes on forever.
This has been true for several years now...(i.e. a handful of stocks accounting for the majority of gains)...
I don't really have an opinion on market direction. I always like to trade the market I have in front of me, not the one I expect and go from there.
Those FANG stocks were the reason for a time but its changed since the republican majority came into place.There is a sharp contrast in the type of governance about the take place. President trump will borrow to get people back to work on roads , bridges and everything that goes with it...that will include eating out and buying cars and so on..next there is tax reform and a lot of money overseas that is afraid to return while current tax rules are in place.. Mr Trump will try to remove a lot of penalties associated with bringing about 2 . 5 trillion dollars back into the country to reinvest in U.S including stocks. Look at the new stocks that are going up since Nov 9th..Industrials because they will contribute to the construction type of jobs (they are called infrastructure spending) and financials. The new President has a Majority and there will be some democrats that will agree with him from time to time called Bi-Partisanship on the news which could help him get things done faster. The valuations are high as you said but in this case the fundamentals may very well catch up in the year to come because of all the government spending that Mr Trump proposes..what we are seeing in the stocks could be a LEG up in a new Bull filled with pessimistic comments. The dollar is pricing in a lot of this stuff . We haven't topped..there is a bid and I think we would have dropped already..on and the etf s are seeing a comeback since nov 9th. So maybe buy financial stocks on pullbacks. But I think facebook might be overdone for now.