Stocks Crossing The 13 Week Moving Average <$10.01 Message Board

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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: James Strauss who wrote (11333)	7/24/2002 12:17:31 PM
From: James Strauss	Read Replies (1) of 13094

A Bottom??? Or Just A Bounce??? ******************************************* The New Lows To New Highs ratio is at such an extreme that we should be getting a bounce... finance.yahoo.com The SPX P/E came very close to that sub 800 fairer valuation estimate I made several months ago... bigcharts.marketwatch.com Current SPX reading: 816 Current P/E: 32.78 SPX/P/E ratio (816 / 32.78) = 24.893227 If we get a more fair valued P/E of 20 we get an SPX of (24.893227 * 20) = 497.86454 Add a 20% earnings growth factor to this and you get (1.2 * 497.86454) = 597.44 To me this means that even with a 20% eps forward looking growth rate for the S&P 500 and an above average P/E of 20, the current 800 levels are still too high... This may explain why foreign companies were expunged from the S&P 500... So, based on this train of thought, it looks like we are getting a rally within the confines of a bear market until the SPX falls below current levels... Jim

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