SP is about 26% undervalued relative to bonds. Crashes usually
happen when it is 35% or more overvalued. If the bonds get
going lower, we may see that, then a crash. -g- That's just
a "scenario". I think a low may have been put for a while,
bonds will sell off some, stocks will rally some, no clue
where we are going from here - I guess we'll need a sell
signal, which can come a lot earlier than 1735. In fact, if
this is a bear market, it could come in a month around
these levels. -g- So, this price is not a price target,
the sell signal in the model is moving in time, and is
now resting near the lows. It will take some time for it
to get higher. -g- No buy signal yet, but we may get one
within a week. Personally, I think the lows may have been
seen, as it is not unusual for those to occur soon after
options expiration. A move to new highs will surprise
absolutely everyone. Why is it possible? Well... the Fed
got power until it is taken away by the falling dollar.
Judging by the T-bonds, this has not happened yet. |
