InTruth
05-15-2016, 06:25 PM
S&P 500 reported earnings in the last couple of years has dropped from $110 to $85 and is on its way to $60 ($15 per quarter). The PE ratio can't go over 25, so 25 x $60 = $1500. But the P/E will go down due to demographics, debt, and deflation. At 12x and $60 reported earnings, the S&P 500 will be at 840. Book value will slowly rise to $800. which is about 1x book value at 840. The peak in the markets will be no later than mid-2017. For the rest of 2017 and 2018 the S&P 500 will collapse down to somewhere between 800-1200. The yield curve won't go negative till 2017. 2 year rates will be above 10 year rates as the 2 year goes above 1% and the 10 year goes below 1%. The last rate hike in June leads to a peak the markets about one year after the last rate hike.
What will be the peak for the S&P 500? 2150-2200. After that the game is over. There is nothing anyone can do to prevent the 3rd major drop in the past 20 years. Printing more and negative rates will just result in money velocity going down even further.
The thing to really keep your eye on are the commercials in the S&P 500 futures. When they get extremely short in 2017 that's your opportunity to put in the big short.
What will be the peak for the S&P 500? 2150-2200. After that the game is over. There is nothing anyone can do to prevent the 3rd major drop in the past 20 years. Printing more and negative rates will just result in money velocity going down even further.
The thing to really keep your eye on are the commercials in the S&P 500 futures. When they get extremely short in 2017 that's your opportunity to put in the big short.