Click to enlarge

Source: Standard & Poor’s, First Call, Compustat, FactSet, March 31, 2013


Each quarter, J.P. Morgan Asset Management puts out a lovely guide to the markets. Its filled with all sorts of excellent and informative charts — its 70 pages long, and its free.

Check it out.

Category: Markets, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “S&P 500 Index at Inflection Points”

  1. WFTA says:

    Okay. There’s the dot com boom and the subprime/commodities debacle.

    What’s the big lie we’re telling ourselves currently?

  2. Chad says:

    I know market timing is difficult, but, damn, that chart is very suggestive.

  3. wisegrowth says:

    There is still some upside, but not much in true value terms…

  4. dctodd27 says:

    If a market can bottom at a 14.1x forward P/E (Oct 2002) and top at a 15.2x forward P/E (Oct 2007), doesn’t that make the forward P/E ratio pretty meaningless? What inference are we supposed to draw from the current 13.8x forward P/E?

  5. nofoulsontheplayground says:

    BR, that’s an excellent report. There’s lots to digest in there.

    One major takeaway for me was seeing a Head and Shoulders Top on the industrial metals chart. That formation targets about a 40% drop from current levels if it breaks to the norm.

    A 40% drop in Dr. Copper and his crew would indicate some serious slack in global industrial production if it occurs. The industrial metals are already swimming against the $98-Billion/month Fed monetization by not participating in the various rallies.

  6. Tamu82 says:

    I agree with dctodd27 . . . all these analysts citing the forward P/E. Past history is not consistent. That’s why I think the PE is useless as we learned from the manipulation you can get from accounting shenanigans. What about dividends? You can’t manipulate them. SO what is the Price-to-Dividend Ratio? Right now, the P/D Ratio is 47 on a REAL basis, adjusted by 2012 CPI.

    Other market tops? 90 in August 2000 and 57 is October 2007. Going back further? 33 in 1929, 21 in 1937, 27 in 1946, and 34 in 1966.

    What does that tell you? NOTHING! These ratios tell you NOTHING! Follow the price action ONLY because it’s the only thing that truly tracks sentiment (buyers and sellers). All that fundamental stuff . . . phooey! Except the FED, watch them for sure — and that’s why the market has room to run, not P/E or any of these other ratios.

  7. Richard W. Kline says:

    That speculative paper-price runs driven by 12-figure QEsing and in an otherwise ZIRP investment return environment have _any_ relation to real economic production, consumer demand trajectory, or sustainable market behavior. And China won’t be there to catch the falling piano of demand this time, as taking a good long step back themselves.

  8. [...] While Timiraos’ article is interesting, I find it a little light on qualitative data, and I think he makes some rather optimistic assumptions.  I think Timiraos’ logic is particularly flawed in the sense that he assumes the current situation is sustainable.  It isn’t!  Investors are currently interested in housing because they are flush with cash.  My question for Timiraos is what happens when investors aren’t feeling so rich anymore?  For context, I will simply leave you with this nice chart of the S&P 500…. [...]