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Strategies & Market Trends : General market lab and commentary -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (337)	4/16/2016 11:16:41 PM
From: Robohogs	Read Replies (1) \| Respond to of 668

BTW the daily squeeze indicators on the SPY/SPX/ES complex are strange. We are seeing increasing momentum being picked up, delayed, from the thrust higher last week. Given the back and forth/to'ing and fro'ing action of the weeks before that, the signals for a big move were about to trigger for a bit bigger selloff. Well the signals never triggered and instead look to be about to signal for a bigger up move to come. Now often this indicator fires as the move has been move, which I think may have happened currently, as the SPY indicator fired to the upside on Thur and promptly treaded water. SPX fired Friday and treaded water. With any up move, /ES will fire Monday. If not, the indicator will roll over and may fire short by late week, first for ?ES and then the others. It all depends on Doha and post-OPEX week. Jon

To: Robohogs who wrote (337)	4/19/2016 11:39:45 AM
From: The Ox	Respond to of 668

I figured you could use some positive feedback and a thank you for taking the time to share the many issues in your post. A lot to consider. An obvious issue (to me), is that you are saying the bear market is finished and we are at the cusp of a new bull period (or was this simply to use as the premise for the arguments you put forth)? I think we are likely at that point in time but I believe the majority of people out there do not think that is the script we will follow going forward. I think your basic concepts on PEs and long term trends in that area are spot on. So many variables are currently "questionable". It will be down the road and with hindsight that we'll know which of those variables were "pointing" in the right direction and which were lagging indicators. PEs are balancing earnings with future growth expectations. Lower multiples imply a negative view on the future and/or superior current earnings environment versus lower growth rates ahead. A few % rise in the total market PE would translate into a substantial rise in the indexes if we assume that the rise is due to improving earnings power vs. declining actual earnings. These valuation concepts are always being questioned. It's important to "see both sides" but our investment decisions must be based on which side we think has the proper view of the future. I'm still on the side of cautiously bullish, especially since we've (essentially) gone sideways for a number of years. The base is built for the next move and we're still in the "grey area" where the next move for the markets is in play. We could see these markets break out, continue to chop and base or roll over substantially. I think we'll see the break out over the next several weeks but since we're in the grey area, I'm less inclined to be aggressive with my investment stance. If we start to see the below concept playing out in reality, then I'll get more aggressively bullish. So over the next 6 months, shifting the forward earnings ahead 1/2 year and lapping the lows in this earnings recession could easily pick up 5-10% growth. SO PEs probably need very modest growth, but the bulk of the work will come from growth.