While I don't have your credentials, I would still like to point out a few items.
1) One problem with Bull/Bear fear/greed arguments is that the amount of information that the average investor uses these days is minimal. Quick-- anyone know Oracle's market capitalization offhand? I'll bet that most people who invest in Oracle don't know. They just look at the price-- "went down 30% in one day, gotta buy the dips".
I think a better measure is the straight one-- supply vs. demand. It's a marketing issue, not a financial issue at this point.
2) As far as historical P/E's, I'd like to know about the standard deviations of P/E's. After all, if every stock has a 10/1 P/E one year, that's a very different market than if half the stocks have 5/1 and half the stocks have 15/1. With Microsoft at 50 P/E, I have a guess that the standard deviation is historically high right now. I also think that there are the companies that investors care about, and the companies where, for example, most of the shares are owned by the company itself.
I simply think we have to eliminate the 'dead weight' in the P/E ratio. I could create, for example, a company called "Just Bonds", which just has a few billion dollars in 30 year US treasuries, put it on the stock market, and probably lower the P/E ratio.
3) Again with the P/E's, there just so much junk in them that why bother? What is the price/sales ratio these days compared to history?
Isn't that at an all time high?
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