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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Bull RidaH who wrote (19348)	5/28/1998 12:55:00 PM
From: SE	Read Replies (1) \| Respond to of 94695

David, What do you think....one last assualt on SPX 1096, SP8M 1100, OEX 534 and then the downstroke begins???? That is my read right now. -Scott

To: Bull RidaH who wrote (19348)	5/28/1998 1:22:00 PM
From: Oeconomicus	Respond to of 94695

David, earnings on the S&P 500 grew at a steady clip from 1962 to 1966, going from about $3 at the bottom in 1961 to $5.50 in 1966. The PE crossed back below 20 in 1962 however and stayed below 20 until 1972 I think. BTW, it took a year and a half for the S&P to pass the end of 1961 peak and it dropped 27% in the interim. My point in the comparison is that the market got way ahead of itself in terms of valuation and, though nothing changed in the economy and the correction may have been event triggered initially, it did correct by 27% over about 3-4 months, bringing valuations down to earth and restoring a healthy level of fear in the market. Regards, Bob