The S&P 500 has reached its initial target of 1950*. Steeply rising 21-day Twiggs Money Flow indicates strong medium-term buying pressure. Retracement to test support at 1925 is expected. Respect of 1920 would suggest a strong up-trend and an advance to 2000.
* Target calculation: 1850 + ( 1850 – 1750 ) = 1950
CBOE Volatility Index (VIX) below 12 indicates low risk typical of a bull market.
The Nasdaq 100 broke resistance at 3700/3750, signaling an advance to 4000*. Rising 21-day Twiggs Money Flow again indicates strong medium-term buying pressure. Reversal below 3700 is unlikely, but would warn of another correction.
* Target calculation: 3700 + ( 3700 – 3400 ) = 4000
Hi Colin, a good read on S&P500 CAPE on Meb Faber’s blog (particularly the second part on comparative global value) http://mebfaber.com
I don’t buy their argument that stocks only outperformed bonds by +/- 3% p.a. from 1993 to 2014 and therefore were a bad investment over the time that CAPE > 20. Anyone who made such a call in 1993 would have been deservedly fired within a year.
Times have changed. Corporate profits have doubled as a percentage of GDP over the last two decades, primarily because of the effect of technology and currency manipulation on wage rates — the same factors that are driving rising inequality.
What countries are currently at a CAPE of 10 or less? Besides Egypt, Syria, Iraq and Ukraine?
….buying countries on low CAPE is like buying stocks with low PE because they’re cheap. They often become even cheaper.
that is exactly right