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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives
SPY 684.84+0.6%4:00 PM EST
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To: Vendit™ who wrote (45704)2/8/2013 10:57:22 AM
From: expiredoptions  Read Replies (3) of 220518
 
RE V: Good article V! I have known about this group for a while. So much for a free market system.
Here's the big problem with what's happening right now with the indexes a couple percent from all
time highs:
In 2000 & 2007 when the markets last hit all time highs,
1: 90% of the companies in the SP500 were meeting or beating earnings estimates.
2: Unemployment was in the 4.75 to 5.25 range.
3: The GDP was at least in the 4% to 5% range at minimum.
Key Point 1:
Those three items are the fundamentals that support all time highs in the market.

Now, here's what we have:
1: 70% of the companies in the SP500 are meeting or beating earnings estimates.
2: Unemployment is 7.8%.
3: The GDP was negative the last quarter.
Key Point 2:
Realistically the fundamentals above, support markets that are -30% to -35% lower than now.

Last Point:
1: Wall Street always leads the way by rallying, driving up stocks and markets way in advance of fundamentals.
2: They anticipate what's going to happen a year or more from now and drive markets in that direction.
Nothing new, its always been that way.
Key Point 3:
What do you think Wall Street (who is responsible for 85 cents of every dollar of every stock) is going
to do a year (or less) from now, if our current fundamentals do not drastically improve?
"There has never been a time in history when fundamentals were this poor and the market at all time highs!"
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