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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Tom Pulley who wrote (83895)	7/5/2003 12:08:25 PM
From: Rock_nj	Respond to of 99985

I think we're getting set up for a pullback between now and October. The markets are still historically overvalued, earnings have still not caught up with the current price of stocks. The markets are looking OVERVALUED. The S&P P/E is still way above the historical norm around 15 (it's around 26 -30 these days). And the VIX index is getting really sleepy. I think August - October is going to be a bad period in the market if we don't get a significant spurt in economic growth and earnings. See: globinvestor.com

To: Tom Pulley who wrote (83895)	7/5/2003 12:26:24 PM
From: Rock_nj	Read Replies (1) \| Respond to of 99985

My longterm charting shows that the S&P 500 should be trading around 700 right now (a 25% to 30% drop from current levels). S&P should be trading around 1,000 in 2010. Add to that the fact that S&P 500 P/E's are still way above (around 26 to 30) their historical average of 15 and the fact that the volitility index (VIX) has become very lazy lately/trading in a trough (the market is complacent) and bullish sentiment has surged ahead of bearish sentiment. It all adds up to stock market downturn between now and October, especially if the economy doesn't show any signs of life.