This edition of Alpha City is a recap of my recent webinar. A replay is available here:

The video in this report is only accessible to members

Here are some questions I’ve been getting from clients and my answers:

Is the U.S. equity market disconnected with reality? NO. The ongoing market rise makes sense. The oversold condition on 3/20 was extreme and there have been positive inflections in all our preferred tactical indicators. Earnings revisions have clearly turned less bad — and that’s BULLISH. Investors are valuing the S&P 500 and its constituents on some type of forward normalized earnings, NOT trough profits. We’ve seen unprecedented monetary and fiscal policy and more is likely to come. Continued skepticism by investors, which is a contrarian positive, is helping equites climb the proverbial Wall of Worry. Earnings revisions are driving equities higher

Is the S&P 500 extremely overvalued? NO. Investors should use normalized S&P 500 index SPX EPS not depressed 2020 profits—at least 2021 EPS, and better would be 2022, which I estimate preliminarily $180-200. Fair value forward P/E calculation should include interest rates, inflation, and the policy backdrop. With all these factors near maximum bullish, I could make a strong case that the forward P/...

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