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

To: donald sew who wrote (9318)	3/27/1999 8:09:00 PM
From: Giordano Bruno	Respond to of 99985

Fascinating chart Don, it looks like 1991 was the birth of the new paradigm guinea pig. Hope it learns to fly. <g>

To: donald sew who wrote (9318)	3/27/1999 9:15:00 PM
From: Les H	Read Replies (1) \| Respond to of 99985

Yardeni has more detailed price-earnings graphs for the S&P at his web site on Stock valuations. The valuation model on S&P price versus earnings is interesting. There is a trading channel that can be discerned from the P/E at which we're now at the upper end of the channel. The channel would range from the high teens, 17-19 to 30-32 which is where the market currently stands. I believe the Federal Reserve valuation model for the S&P (which is available at the same site) would place fair value at a P/E of 18. The following Adobe Acrobat file contains the price-earnings graphs for the S&P. yardeni.dmg.com Also, the earnings growth has been deteriorating since late '97 / early '98 as you noted in your observation of the DP chart. This tends to precede a major market downturn and an economic downturn by a couple years or more.