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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Gary105 who wrote (31065)	4/20/2012 11:04:45 AM
From: architect*	2 Recommendations Read Replies (3) \| Respond to of 224215

So what do you think is next - breakdown to the triple digits or breakout to 2000 and beyond? Methinks, SPX 2000 is not in the cards for this economic cycle. (Using the four year cycle theory ~ Q2 2009 - Q2 2013), which bottoms again in Q2 2013. I'm looking for SPX 1450 - 1520 as a top, during this economic cycle, flowed by a correction starting 2013 - 2014 initiated by poor fiscal policies from major countries, on down to local municipalities. Too much deficit spending. Currently average PE ratios in equity markets of developed countries is under 12, and the average PE ratio in emerging markets is under 10. Some valuation appreciation in the world equity markets could be supported by those valuation metrics + 10% ~ +20%. But, not SPX 2000. Growth stocks are fueling this rally. Apple's growth from 2010 to 2013 is about 50%, Apple 2012 PE ratio is 13.6, with an estimated for 2013 PE ratio of 12.0. Apple's PE ratio, compared to a historic PE ratio of 10 - 20 for the SPX, and PE ratios for international markets makes a bullish case . I think the Wall Street Journal notes a current PE ratio of 15 for the SPX. SPX 2000 - implies a 45% growth in earnings from today, that's not reasonable anytime soon. Countries and banks de-leveraging their debt, by selling stuff, (like stocks and gold) would initiate the SPX under 1000 scenario, that's more likely to occur before SPX 2000.