Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: High-Tech East who wrote (10732)	2/24/2002 11:51:37 AM
From: Killswitch	Respond to of 19219

Hi, thanks for that post it was interesting reading. I have one complaint about what Richard Russell says- why is he using a lagging indicator (trailing P/E ratio) when he clearly states that he thinks the market looks ahead. Obviously if you look at trailing P/E at this point in the economic cycle the market will look overvalued since earnings have been so bad over the last year. But the market isn't looking at that, it is looking ahead. So I think it makes more sense to use a model that looks ahead like the Fed model of valuation. Using that, the S&P 500 is currently slightly undervalued, and will be more undervalued if earnings estimates get raised in the future. If the market starts to perceive that the economy is going to keep recovering then I think we have to expect the market to head up higher. Which brings me to my other question for you: what makes you think we won't continue recovering this year? Thanks