WOW!!! What else can you say when the S&P 500 is up almost 20% in two months?  That's a pace of 120% annual gains, if we make that for 10 years we can turn $100,000 in to $265,599,227.91 so go market, right?  Obviously, if it becomes that easy to make money – even for just a few people, then money will very soon become meaningless so we need to have a genuine Fear Of Missing Out if this is going to be a sustained rally that takes us to 4,200 by November (another 20%) and S&P 5,000+ to close the year . The funny thing is that the S&P 500 companies themselves – EVEN when you include the earnings powerhouses of AAPL, FB, GOOGL, AMZN and MSFT, have made 32.9% less in Q2 than they made in Q2 of 2019 , which was only a 0.8% improvement from Q2 of 2018 and the S&P 500's earnings are projected to be down 23.2% in Q3 and down 14.3% in Q4, giving us a not-so-grand total of -20.4% earnings for the year. Overall earnings per " share " of the S&P 500 are in the $120-130 range for the year, though that assumes a very nice rebound in Qs 3 &4 that are not entirely certain.  Let's say the EPS is $125, though and we divide that by 3,550, the current share price of the S&P 500 and that gives us a p/e ratio of 28.4 – about double the historic average.   As we discussed in our " Stock Market Physics " notes yesterday (and see the original SMP article here ), the higher you pump up the S&P, the more inflows you need to sustain it so it gets harder and harder to sustain it as it goes higher.  We have money flowing into the markets via Government Stimulus and Fed Stimulus and that's great while it lasts but Steve Mnuchin (of Goldman Sachs and the Treasury) just told Congress they need more stimulus NOW or " bad things will happen ."   Well, since we clearly know that Steve Mnuchin doesn't give a crap about people, he must mean bad things will happen to his …