Oppenheimer's 'rally
point indicator' nailed the recent bottom
Speaking of
relationships between price and earnings, the most commonly
referenced relationship between stock prices and earnings is
theprice-to-earnings (P/E) ratio.
“[O]ver the course of
the last two years we have noticed the tendency for the S&P 500
to rally from selloffs when the market’s trailing 12-month P/E
multiple falls to a level of around 16.5x,” Oppenheimer’s John
Stoltzfus said in aFebruary 17 note to
clients. “Since 2014 through
last week this has occurred on six occasions when the S&P 500
multiple fell to levels ranging from 16.46x on February 3, 2014 to
most recently when the 12-month trailing P/E multiple touched
16.47x on February 11, 2016.”
As we mentioned above, February 11 was when the S&P 500
touched its low of the year.
View
gallery
.
Oppenheimer
Extraordinary stuff.
“Is it purely coincidence or is the market trying to tell us something? We think the latter.” -OpCo’s Stoltzfus pic.twitter.com/PCXKJp6BCM
Oppenheimer's 'rally point indicator' nailed the recent bottom
Posted by bluezango on 22nd of Mar 2016 at 12:30 am
Oppenheimer's 'rally point indicator' nailed the recent bottom
Speaking of relationships between price and earnings, the most commonly referenced relationship between stock prices and earnings is the price-to-earnings (P/E) ratio .
While the P/E ratio is not considered to be a very reliable indicator of short-term returns , one Wall Street analyst noticed an interesting pattern emerging in the past two years.
“[O]ver the course of the last two years we have noticed the tendency for the S&P 500 to rally from selloffs when the market’s trailing 12-month P/E multiple falls to a level of around 16.5x,” Oppenheimer’s John Stoltzfus said in a February 17 note to clients . “Since 2014 through last week this has occurred on six occasions when the S&P 500 multiple fell to levels ranging from 16.46x on February 3, 2014 to most recently when the 12-month trailing P/E multiple touched 16.47x on February 11, 2016.”
As we mentioned above, February 11 was when the S&P 500 touched its low of the year.
View gallery
.Oppenheimer
Extraordinary stuff.