Market at record high “invites disappointment and disillusionment”

The S&P 500 rose 3.3 percent last week to close at another record high.

“By any metric, valuations are in nosebleed territory, but there is this entrenched view that the Fed has your back, that the polls are wrong and there will be a Trump sweep, and that a vaccine is coming this fall,” said David Rosenberg, founder and president of Rosenberg Research.

“This was the summer investors fell hard for risk — at first reluctantly, having just been dumped over the winter, and now avidly,” wrote Michael Santoli at CNBC.

Still, Santoli suggested that “the level of infatuation on display among traders toward at least some parts of the market now invites possible disappointment and disillusionment before too long”, noting that the S&P 500 is extended further above its 200-day average than at any time but one in the past decade.

“We’re overbought in the S&P 500 as an index in the short run,” National Securities chief market strategist Art Hogan told CNBC on Friday.

Hogan said that the index could fall 5 to 10 percent in the September and October time frame.