Fast Money was Bullish

Wow, the attitude on the market changes fast.  The CNBC Fast Money group, which have been bearish all throughout last week, have finally gotten bullish after a couple of up days, which is a warning sign.  Even though the Fast Money traders are usually a contrarian indicator, since they have been bearish for so long, you can't just suddenly say that the rally will fail.  It does probably tell you that there isn't that much upside, and if there is good news at the G20, that rally will probably be short lived. 

Sentiment is a short term trading tool, not a long term driver of stocks.  In the long term, the trend in earnings vs. expectations and valuations are what will determine stock prices. 

With central bank liquidity being taken out of the market, there is less money to go around to buy stocks.  Even though the stock buybacks are still coming through hot and heavy, it hasn't had the buoyant effect on stocks like it did in the past.  Remember, 2007 was a huge stock buyback year, yet, that is when the S&P topped out. 

We have a healthy gap up in the works, as Powell is set to talk later today.  It seems like traders are expecting a dovish message as they are bidding up stocks.  Aside from his last speech, Powell has tended to be optimistic about the US economy and sounded hawkish.  So we'll see if he has really changed his tune or if the last speech was taken too dovishly.  In any case, I think there is a likely pullback off this gap up and just a couple of days ahead of the G20.  I expect higher prices after the G20, mainly because of the likelihood of Trump trying to talk up whatever deal or agreement he makes with Xi.  I doubt he'll want to come out of the meeting with nothing tangible.