Thanks for posting - there are some important insights here as to what's been the true driver of prices.   I posted a few weeks ago about enhanced liquidity coming into fold.  I will continue to track and share such data but it's tailored primarily to the short term signals.   I will be curious to see the impact of the TGA restocking in the coming weeks but overall bank reserves are the key determinant which has been greatly enhanced via Fed Credit.   

1. When the fed extends credit to banks/financial intuitions, it will effectively boost bank reserves (eventually). Fed credit allows us to see a more further out view this way. It will not only spill over into bank reserves eventually but also interbank funds. Banks can lend to each other when they have excess reserves. And they often do. And due to fractional banking, when banks get this excess liquidity from the fed reserve, they are essentially also creating NEW money because they only need to back up a certain % of the amount they are lending. So fed credit is a very powerful tool which spills over into several liquidity sources. View it as its own separate entity which is having a large effect on net liquidity sources with a more delayed effect.  There is also foreign flows that may spill over into various markets - so one could track China and G5 spending as well.  

Prices have not accelerated due to fundamentals improving for most companies  (earnings are down even for some big tech while P/E have ratcheted up significantly).  To be crystal clear, recent earnings have largely bested  only reduced estimates while prices have largely moved up on multiple expansion (primarily tech with other sectors not seeing expansion).  The market is now looking  (projecting) to future earnings increasing so that will be something to monitor in the coming quarters as part of the fundamentals backdrop.   The recent AI talk has been the primary driver for such enhanced P/E with hopes of an onslaught of productivity growth and/or increased demand depending upon the specific company.  Regardless of any reason, we must respect the prevailing trend until such evidence changes. 

With that said, it's all about flows and positioning.  Call buyers force market makers to inject liquidity (hedge their positions via purchases in the market as they sold calls).   Technical analysis simply portrays those actions via a chart (a picture in time) which changes daily in accordance with such flows.  As I have posted several times, there are only two things that matter to market pricing.  1). How much money is available (in the system)  2).  How much of that money is invested on a given day.   Most other items are simply measurement tools to be viewed as guideposts and probabilities - for example  RSI readings and divergences etc etc.   Currently, looking for market to remain stable/upward until late summer with Sept/October period. However, will be watching price action closely on June as I expect some gyrations this month starting with reduced liquidity early next week before rebounding after a few days. Thus is subject to alterations and will keep aprised.  Respect the prevailing trend and adjust when evidence suggests. 

One last thing, the Fed Credit (Loans) work thru the system with a multiplier effect (providing an offset to QT) so as long as short term liquidity remains robust things hold up - however, this also makes core CPI sticky as we have seen over the past year.   Thus, those with assets are much better off than the lower income who do not have appreciating assets to counter the increases from inflation on items they purchase.  Even AI will serve to benefit the affluent vs others especially short term.

Supporting documentation of P/E Expansion (see chart below)

For the S&P, all of the YTD return has been driven entirely by multiple expansion.  This is peculiar in the context of a still-tightening Fed, but could be explained by bets on a Fed pivot and expanding liquidity from Treasury/Fed bank support. (Cameron Dawson).   My comment:  Yes driven by expanding liquidity (synthetic QE) 

Chart 2: Shows the drawdown in the TGA (as of Friday it's now below $30 Billion).  This drawdown has been one source of liquidity for the market. 

Chart3: Strong economic data & mkt rallies have led to jumps in both economic surprises and financial conditions. In 22, these readings would have troubled the Fed, fearing these could exacerbate their fight against inflation, do they have the same urgency now? (Cameron Dawson) 

Chart4: Typically, higher real yields have put downward pressure on Growth/tech valuations, but not in 23. There has been a marked divergence between real yields, back near 23 highs of ~1.6%, and Growth valuations, at 25x now above their pre-pandemic peak. (Cameron Dawson)

Hopefully you appreciate the work put in here to summarize versus someone simply making rogue statements about the market without providing any evidence.