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S&P 500 Eying 3,000

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The S&P 500 (SPY - Free Report) just surged past the 2,950 resistance-level after testing it on 3 separate occasions. The recent rally was catalyzed by economic optimism as well as hopes of more monetary and fiscal support. Now the 2,950 resistance has pivoted to a support level as the S&P 500 looks to hit 3,000, a level we have not seen since the first week of March.

I think the markets may be getting too optimistic too fast. Unemployment is sitting at depression levels and is only anticipated to get worse over the next few months.

Tech giants like Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , and Facebook (FB - Free Report) have been provided with a COVID tailwind and are driving the equity markets higher. Society is relying on technology for virtually everything amid this pandemic, but is that enough to keep the entire stock market afloat?

Unemployment is expected to be north of 20% by the summer, and it will take years to reach pre-COVID rates. It could be years before earnings reach 2019 levels again. I would be cautious in your equity purchases as stocks valuations get stretched on over-optimism.

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