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Almost No Chance of a Top


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#11 bln

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Posted 15 February 2017 - 04:18 AM

We are half way through. SP500 has ~300 more points to go on the upside.



#12 OEXCHAOS

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Posted 15 February 2017 - 11:22 AM

No better chance at a top today, either.

 

We do have an Options Oscillator Sell, but I'd not be surprised by a rally into the close to set a modest decline up.

 

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#13 gameover

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Posted 15 February 2017 - 12:41 PM

I guess those that are correct get censored.

 

i'll give you some ta.  b-berger's tell me inverted h&s target on dow is 21,500



#14 tommyt

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Posted 15 February 2017 - 01:13 PM

"No better chance at a top today, either."

 

5 o'clock Charlie came by again this morning for the dip buy...2 days in a row to boot!



#15 OEXCHAOS

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Posted 15 February 2017 - 03:19 PM

I guess those that are correct get censored.

 

i'll give you some ta.  b-berger's tell me inverted h&s target on dow is 21,500

 

Well, yay. Some TA. Snarky, but TA.

 

There are a couple thousand users on TT. I don't think any of them has as many warnings. Have you read your warnings? Being "right" (or "wrong") doesn't have anything to do with them. Taunting, however, does.

 

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#16 gm_general

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Posted 15 February 2017 - 03:51 PM

On a related note, I bid on ancient coins. There was a nice Roman coin I had my eye on that was assessed at $100. It just went for $950. When it comes to irrational emotions driving purchase decisions, I guess the sky is the limit, and you can't fix stupid. Who cares if its the 3rd most overvalued market in 140 years? Why not bet on it breaking to #2, or #1?

 

http://www.dailymail...l-outcomes.html


Edited by gm_general, 15 February 2017 - 03:53 PM.


#17 OEXCHAOS

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Posted 15 February 2017 - 04:28 PM

On a related note, I bid on ancient coins. There was a nice Roman coin I had my eye on that was assessed at $100. It just went for $950. When it comes to irrational emotions driving purchase decisions, I guess the sky is the limit, and you can't fix stupid. Who cares if its the 3rd most overvalued market in 140 years? Why not bet on it breaking to #2, or #1?

 

http://www.dailymail...l-outcomes.html

 

And we also need to make sure we contextualize "valuations". Money always needs to find a home and it goes where it's treated best. Where can money go to get liquidity? Where can it go to get a "current" return? Where can it go to have minimal currency risk? Where can it go to have minimal financial/systemic risk? Where can it go to have minimal legal risk? Where can it go to have minimal inflation risk?

 

When there's no other game in town that doesn't guarantee loss due to inflation, or that doesn't have other significant and untenable risks, the risks presented by a context-less but "high" P/E (that could even be corrected) don't seem like a huge issue.

 

Mark


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#18 gm_general

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Posted 15 February 2017 - 06:22 PM

If you study the behavior in past P/E bubbles, you would see that the P/E of the moment is not terribly relevant given a random point in time, but roughly every generation there is a P/E bubble (as defined by CAPE) that peaks at a point in time, then the P/E is capped by a declining line of resistance, and this decline has a fairly constant slope over the last 120 years. In the prior cases, this deflation took about 18-20 years, and it did not terminate until it reached 5-7 range. This most recent P/E bubble instance, which peaked in 2000, is quite exceptional in its size vs the other cases, the peak being over 40, vs. second place case of 1929, which peaked around 30 as I recall. So as long as the P/E of the moment is not contacting that line of resistance, you could get a higher value to it, whether through declining "E" or rising "P". The thing is, we are about at that point where P/E is at that sloped resistance line. Its not an exact barrier of course, there is some fuzz to it, and of course its not something for day trading of course. CAPE is now about 27-28 BTW.

 

What is going on here seems to be some generational deterministic behavior on a collective scale. I know that is something that many people find abhorrent, but I am not saying specifically you or I is predictable, only the collective population of a particular division of the world. There are other such examples of repeated behavior every generation or in other cases every other generation.

 

Another thing I like to point out is there is one thing worse than no yield, or excessively low yield - its losing money. People forget that rather easily.