http://www.traders-t...damental-folks/

Without the tax cuts, the current P/E is at obscene levels, at around 25. If the tax plan is implemented, assuming 20% tax rate, the P/E would drop from 25 to 16.9. 

 

Voila ! The current forward P/E is around 17.45. Last year, it was merely a projection. Now it's a fact. 

Now here's something to think about. Have you seen a major bull market top at fair valuations ? Nope. That means we are not going to top at a P/E of 17 but somewhere higher, much further away from the median.

 

At 16.9 P/E - S&P 2570 (Fair)

At 20 P/E - S&P  3034 (Overvalued)

At 25 P/E - S&P 3792 (Bubble territory)

 

I would wager that S&P will at least reach the overvalued territory, before this bull market ends.

 

I still stand by this. Whether it reaches overvalued or bubble territory, i don't know. Time will tell. But we will for sure reach at least the overvalued territory, before a 30% correction kicks in.

This B wave in gold could resolve to $100 an ounce, and Bitcoin could be the reason.

https://www.independ...r-a8323441.html

fm www 1100 dow pts straight up eh?

It's so easy to do. You see your oscillators up in Sell territory. You know the market is "overdone" to the upside. Maybe you've even fallen for some fundamental Bearish argument.

It just looks like it is going down.

Well, let me tell you, the market looks like it's ready to go down a lot more than it's actually ready to go down. Go pull up your favorite oscillator and really look at how much the market rallies after it gets overbought on that indicator.

Now, obviously, when a market is making new highs, this is more important to remember than when it's range-bound or in a correction, but even so, be mindful.

I've got a lot of stuff overbought. I'm not going to entertain even VST shorts until things really turn and stuff crosses downright negative. In fact, despite a FL/FS Sell today, I suspect that we rally (maybe it gets right tomorrow...maybe not...). I'm looking at the ES 280400 area for a long.

Mark

Summer doldrums, slow, drifting, choppy market, but as they say, NEVER STEP IN FRONT OF A STRONG MARKET (unless it is ST and you have a stop in place)

Dull markets can be dangerous. 

Strong markets consolidating can inflict considerable pain on the naive or super confident traders.

My stops are simple with basic logic: 5-period average plus or minus ATR * factor

"factor" is 1.2 for daily, and 2 or 2.5 for shorter periods.