Market Alert - Stocks or Bonds?

The persistent uptrend in equity markets in 2013 has been a sight to behold. Equities are now accelerating higher and due at least a short-term pause. Accelerations are typically ending patterns in stock markets. The S&P 500 closed today (Tuesday 21st May) at 1,669, a full 26% above its long-term 200-week moving average. Equities are heavily overbought in the near-term and quite overvalued relative to bonds, as the following chart shows. Be patient about adding to your stock portfolio at the present time.

Equities are now quite overvalued relative to bonds. The S&P 500 is trading 26% above its long-term moving average and pricing in an awful lot of good news here.