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Strategies & Market Trends : Shorting SPY for fun and profit. -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (14)	11/2/1997 11:48:00 PM
From: studdog	Read Replies (2) \| Respond to of 346

Bonnie: Awesome link. My attempt at distilation: Fair value of S&P 500 = 802 as of Sept. Three ways to correct overvaluation,1. drop in rates,2. rise in earnings,3. drop in stock price. I believe an unexpected rise in earnings is not in the offing. A drop in rates, probably. A drop in stock prices? very likely IMHO. In previous times of overvaluation the graphs in your link showed not just a correction to the fair value line but some overcorrection. This would imply a greater than 10% downside for the S&P from here if rates don't drop. Assuming they do drop the fall would be less. What a great chart in that link. Thanks,