A start, is it the beginning or the end? M2M, 8/11/2009
#2
Posted 11 August 2009 - 05:00 PM
everybody is expecting a pullback to 950's (and then blast to new highs?)
i'm minding the gap in the low 900's from july 14th (to get the pullback to 950 crowd thinned out)
a few calling for new lows (some stoolies among them)
don't be shy, let your opinion be seen/heard
#4
Posted 11 August 2009 - 05:28 PM
Graph below takes the 140 year average S&P500 earnings yield of 7.5%, and uses the current and future estimated earnings to establish a theoretical "fair value" for the S&P500. That is plotted on the left axis in red, and compared to the actual price in dark blue. The delta between the two (i.e. how much the S&P500 is overvalued or undervalued) is on the right axis.
If we ignore the fact that the S&P500 is close to losing money for the first time in its history, and instead focus on the future earnings as estimated by S&P, the fair value is about 495. If we take into account the fact that usually at the bottom of a secular bear market the S&P500 can be undervalued by -0.30 on a log scale, then the price of the S&P500 could dip as low as 253.
#5
Posted 11 August 2009 - 05:34 PM
With this measure, "fair value" is 569 for the S&P500. Assuming it undershoots under the trending channel to the same degree it overshot it, the price could dip below 359.
All prices in these graphs are monthly averages.
In conclusion, I am bearish, and won't become bullish until the S&P500 is below 500 or so. Disclosure: I am currently short and holding as a long term trade. Hoping the market won't be irrational longer than I can remain solvent.
#6
Posted 11 August 2009 - 05:41 PM
I figure the bulls are gonna try to protect YM 9000 like the plague.
#7
Posted 11 August 2009 - 05:58 PM
byhiselo, on Aug 11 2009, 04:00 PM, said:
everybody is expecting a pullback to 950's (and then blast to new highs?)
i'm minding the gap in the low 900's from july 14th (to get the pullback to 950 crowd thinned out)
a few calling for new lows (some stoolies among them)
don't be shy, let your opinion be seen/heard
ding-ding-ding

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#8
Posted 11 August 2009 - 06:27 PM
The next obvious pasta shport, ES 30 min 900MA, is around 973...which is also a couple pernts from the hourly 500MA at 970 (both rising).
Broadly speaking I'd like a bigger drop here, then a retrace to a lower high in later/end Aug, riddled with neggy Ds.
Then we could put another log on the fire.
Your life is the sum of a remainder of an unbalanced equation inherent to the programming of the Matrix. You are the eventuality of an internal anomaly, which despite my sincerest efforts, I have been unable to eliminate from what is otherwise a harmony of mathematical precision. While it remains a burden assiduously avoided, it is not unexpected, and thus not beyond a measure of control. Which has led you, inexorably, here.
You haven't answered my question.
Quite right. Interesting. That was quicker than the others.
#9
Posted 11 August 2009 - 07:25 PM
Butt more important than guessing at levels is aSSertaining the current trend.
Looks to me like it's just changed to down, as the goose got slaughtered at 1,000.
The entire world of dongtraders gashing themselves tonight, reampeating over and over, "I shoulda got out over 1,000....DOH!"
It's a new world, with no guarantees not just for common stocks, butt also no guarantees for preferred stocks, no guarantees for money markets, no guarantees even for "secured" bondholdres, who can be screwed on the whims of czars.
Only safe investments now are things like silver coins, canned goods, tools, weapons, and fully paid-up lifetime VIP passes down ta the Slap 'N' Tickle.
#10
Posted 11 August 2009 - 08:01 PM
Sudaca, on Aug 11 2009, 05:17 PM, said:
200 week is also KWave's favorite 900 day
80% cash, 20% short EM via EDZ.
Combine the low vix with:
"In its poll on July 9, just one day before the market launched off its July low into the stunning rally of the last four weeks, the AAII poll showed 54.6% bearish. In its latest poll, released Wednesday night, it showed 50.0% bullish. If it was taken now, after yesterday’s triple-digit rally, it would probably be even higher. We have always considered any number between 50% to 55% as the danger zone." http://syhardingblog.com/new/
and one might NOT want to get on board the bull train
Mr. Widget is my Guide http://wallstreetexa...or-day-traders/
#11
Posted 11 August 2009 - 08:03 PM
Quote
The Federal Reserve is set to halt its purchases of up to $300 billion in U.S. Treasuries in mid- September as scheduled, and will probably announce the decision next week, two former central bank governors said.
Bloomberg
CalculatedRisk
#12
Posted 11 August 2009 - 08:44 PM
#13
Posted 11 August 2009 - 08:51 PM
#14
Posted 11 August 2009 - 08:56 PM
#15
Posted 11 August 2009 - 09:09 PM
Scully, on Aug 11 2009, 04:34 PM, said:
With this measure, "fair value" is 569 for the S&P500. Assuming it undershoots under the trending channel to the same degree it overshot it, the price could dip below 359.
All prices in these graphs are monthly averages.
In conclusion, I am bearish, and won't become bullish until the S&P500 is below 500 or so. Disclosure: I am currently short and holding as a long term trade. Hoping the market won't be irrational longer than I can remain solvent.
Good info, thanks. Don't forget Goldman Sucks has the job of making sure that doesn't happen, backed by Helo Ben and Turbo Tim:
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