The small caps as well as both sections of the S&P500 continue attracting money.
The NQ8 as well as tech -related sectors are ahead of the rest of the market
However, low rates have also pushed money into defensive/income based sectors such as XLU/XLRE.
We can see below that the Yields based model based on Q1 earnings still displays prices that are well within attractive valuation - the Blue line shows the level where prices become overvalued.
The model that is based on Q2 earnings expectation is still more obviously bullish as prices have even more room to move higher.
Conclusions:
Based on the current Money Flow situation and equities valuations, markets are not ready to experience significant pullback.
