"
Current liquidity conditions dictate conservatism. The Fed is
aggressively raising interest rates and reducing its balance sheet.
Further, fiscal spending is falling well short of that in the prior
two years. As a result, liquidity is exiting the financial markets,
which augurs a bearish trend.
We are not fearmongering, but consider that CAPE fell to seven
in the bear market and recession of 1981-1982. That was the last
time with comparable inflation as today. Assuming no change in
earnings, the S&P 500 would have to drop to 925 to reach a CAPE
of 7!“ ~
Michael Lebowitz
Posted by fredsaid on 24th of Jul 2022 at 05:49 pm
Interesting that SnP would need to drop 925 to get to CAPE 7.
Since my initial price target on the SnP is 3200 (31.8
retrace from high) if I do the math backwards and add 925 to 3200
we get 4125. I'm assuming CAPE would be a a little more if
we're a little higher so 4150-4200 seems like a beauty area to
re-enter a longer term 6-9 months SnP short.
Posted by rmoore100 on 25th of Jul 2022 at 12:45 pm
So just to clarify EdZ, the CAPE information from Michael
Lebowitz indicated, when compared to 1981-1982, an S&P
"drop OF 925" from where we are now, or was he actually
saying a "drop TO 925" on the S&P ?? Thanks
!!!!
The CAPE Ratio (also known as the Shiller P/E or PE 10 Ratio) is
an acronym for the
Cyclically-
Adjusted
Price-to-
Earnings
Ratio. The ratio is calculated by dividing a
company’s stock price by the average of the company’s earnings for
the last ten years, adjusted for inflation.
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
" Current liquidity conditions dictate conservatism.
Posted by EdZ on 23rd of Jul 2022 at 07:46 pm
" Current liquidity conditions dictate conservatism. The Fed is aggressively raising interest rates and reducing its balance sheet. Further, fiscal spending is falling well short of that in the prior two years. As a result, liquidity is exiting the financial markets, which augurs a bearish trend.
We are not fearmongering, but consider that CAPE fell to seven in the bear market and recession of 1981-1982. That was the last time with comparable inflation as today. Assuming no change in earnings, the S&P 500 would have to drop to 925 to reach a CAPE of 7!“ ~ Michael Lebowitz
Interesting that SnP would need
Posted by fredsaid on 24th of Jul 2022 at 05:49 pm
Interesting that SnP would need to drop 925 to get to CAPE 7. Since my initial price target on the SnP is 3200 (31.8 retrace from high) if I do the math backwards and add 925 to 3200 we get 4125. I'm assuming CAPE would be a a little more if we're a little higher so 4150-4200 seems like a beauty area to re-enter a longer term 6-9 months SnP short.
So just to clarify EdZ,
Posted by rmoore100 on 25th of Jul 2022 at 12:45 pm
So just to clarify EdZ, the CAPE information from Michael Lebowitz indicated, when compared to 1981-1982, an S&P "drop OF 925" from where we are now, or was he actually saying a "drop TO 925" on the S&P ?? Thanks !!!!
*38.2 not 31.8.
Posted by fredsaid on 24th of Jul 2022 at 07:51 pm
*38.2 not 31.8.
The CAPE Ratio (also known
Posted by steve on 24th of Jul 2022 at 01:29 pm
The CAPE Ratio (also known as the Shiller P/E or PE 10 Ratio) is an acronym for the Cyclically- Adjusted Price-to- Earnings Ratio. The ratio is calculated by dividing a company’s stock price by the average of the company’s earnings for the last ten years, adjusted for inflation.