After gaining 13.07% in the first quarter of 2019, the S&P 500 started the second quarter increasing 3.93% in april. If you are interested in learning more about stock buybacks and their impact on the stock market since 2010, please read chris matthews, marketwatch's markets reporter, article about corporate buybacks.Cognitive development learning let's examine price, sentiment, and valuation for may.

Momentum investors had another fantastic month. Both VTI and VEU have signaled "invested" rather than "cash" for the third month in a row.Cognitive development learning although not one of the ivy portfolio asset classes, look at the recent price action of WTI crude as we begin may. Oil prices peaked during the first few days of october 2018 before dropping along with stocks during the correction of 2018.Cognitive development learning this may indicate momentum is slowing, keep watching the chart.

After briefly reading "extreme greed" toward the end of april. The CNN business fear & greed index ended april at 66, falling into the "greed" range.Cognitive development learning the only component reading "fear" as we start may is "junk bond demand." categorizing the seven components showed the following readings in early may: 1 "fear", 2 "neutral", 3 "greed" and 1 "extreme greed." this index bounced aggressively off the 49 level at the end of march, can it stay above 49 in may?Cognitive development learning

Peter lynch's "rule of 20"—which states that the stock market is fairly valued when its trailing price-to-earnings ratio plus the inflation rate equals 20—suggests that US equities are broadly valued correctly at present.Cognitive development learning looking at data going all the way back to 1954, the sum of the 2 tends to average out to about 20. Morningstar's market fair value gauge ended april at 1.00, showing the same result as the "rule of 20", the market is neither overvalued or undervalued.Cognitive development learning looking at the price to sales ratio for the S&P 500 it tells a different story; it currently reads 2.19, close to the high of 2.20 recorded during september 2018.Cognitive development learning the dshort blog at advisor perspectives published two recent updates showing the market remains overvalued: is the stock market cheap?, market remains overvalued.Cognitive development learning as I wrote in my june 2017 update: the biggest issue with valuation data is that it becomes the least important factor as we move closer to the end of bull markets, and significant market returns can happen as an expensive market becomes more expensive.Cognitive development learning

The S&P 500 is trading at or near all time highs. Price action is positive for owning stocks, treasuries, and reits according to the ivy portfolio system.Cognitive development learning sentiment is a bit greedy. Valuation is still on the high side. With the S&P 500 up 17.51% to start 2019 through the end of april, now is a perfect time to rebalance.Cognitive development learning given the S&P 500 advance to start the year, it would be normal for the index to decrease slightly between may through october. The economic expansion in the united states looks like it will set new records in july, so the next few months will likely include more talk about the length of the current U.S.Cognitive development learning expansion. As we move closer and closer toward euphoria in the market, please stay disciplined. Let's end with quotes from two well known investors: