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On a 50-year view, stocks do indeed look cheap relative to bonds. But the inclusion of 90 earlier years of data muddies the message.

After a two-month lull, stock market momentum reasserted itself in May bringing our summer S&P 500 target of 2,600 back into focus… Meanwhile, we’ve fielded several media calls about the “FANG” stocks’ large contribution to some YTD returns—but that doesn’t diminish the new highs being made elsewhere by disparate groups… NYSE Weekly A/D Line and New Highs/Lows figures also suggest the stock market isn’t yet top-heavy enough to tip over.

The stock market “melt up” scenario is underway but has proven less broad than we expected. Just as in the late-1990s, Technology and NASDAQ are the main subjects of investor adulation.

Read this week's Major Trend Index.

Investment factors experience performance cycles just like every other asset and index. The Value factor is robust across definitions, as all eight versions produced positive excess returns under long/short and long-only methodologies.

The two-month Up/Down Ratio for Q1 results shows a reading of 1.48. Like the quarter before, an excellent “one-month” figure has been dragged down by a second month’s results.

As the numerator of our numerator shrank, the Ratio of Ratios made its way into “Small Cap Discount” territory for the first time in seven months.

Value’s 2016 outperformance gap has been erased in the Large Cap space; Small Cap Value stocks slipped back into negative territory for YTD 2017.

So much for that 2,400 resistance level. The S&P 500 plowed through its March 1st high as we closed out May and started June. Valuations, terrorist attacks, and a cloudier political climate are continually being shrugged off.

Although the glamorous Tech giants have captured investors’ attention of late, from our perspective, the old school, physical Semiconductor plays hold the greatest appeal.

Home Entertainment Software, Managed Health Care, and Specialized Consumer Services are among the month’s intriguing opportunities based on the current Group Selection (GS) Scores.

The best interpretation of the current cross-asset message is the scenario of goldilocks, and there are reasons to believe this is a possible scenario for the near term.

The global risk rally is broad-based enough to justify a favorable credit view and we still believe higher quality credit offers better reward/risk.

Higher quality Corporate bonds are big beneficiaries of the goldilocks environment.

Value can’t catch a break in 2017; every month has produced a negative performance spread. Price-to-Book has been the worst single Value factor this year, hurt by the heavy Energy and Financials weight in its cheap quintile.

The MTI remains safely in the positive zone.

Excluding money market, all equity and bond fund categories have captured cumulative net cash inflow that is more than five times the level seen at this time last year. ETF inflow this year has accounted for nearly 80% of all flows.

This multi-factor estimate of stock market risk is based on a regression to median stock market levels.

Traders like to say there’s nothing more bullish than a new price high, but not all new highs are created equal.

Read this week's Major Trend Index.