Re: [RT] Commodities

["BobR" <bobrabcd@xxxxxxxxxxxxx>]

Let's assume the drop is halfway over for the spx 
cash, i.e. 600 points from 1500 to 900.  That means another 600 points down 
to 300, or maybe 450 on the conservative side if it only drops 50% 
from current levels per Norman's PE calculations.  Strangely enough I have 
some software that is projecting 301.65 on the cash in 34 months after a high in 
3 months.  On the weekly it is 13 weeks to a high and 38 weeks to a 
low.  Just in the FWIW category since it is all geometry bound to be 
distorted by politics and economics.  Code is protected so I can't answer 
how it does the calculations.  Note that there is no astrology involved in 
Norms calcs this time, but its got me wondering what his astro calcs would say 
about the timing and price projections on another 50% down move.
 
bobr
 
<BLOCKQUOTE 
>
  ----- Original Message ----- 
  <DIV 
  >From: 
  Norman 
  Winski 
  To: <A title=realtraders@xxxxxxxxxxxxxxx 
  href="">realtraders@xxxxxxxxxxxxxxx 
  
  Sent: Sunday, January 12, 2003 2:37 
  PM
  Subject: Re: [RT] Commodities
  JC,  Thanks for the recognition.  
  However, I must differ with you on yourevaluaton of thecurrent vs. 
  historical US stock market PE ratio.  Until the previous 
  maniabegan  in the 1980s,  most major bull markets topped with 
  the PE between18-22.  It is my understanding that the S&P 500 
  currently is at a PE near30.Most major bear markets have ended with the PE 
  in single digits.Obviously, for the US stock market to follow it previous 
  200 year pattern,earnings would have todramatically improve by at 
  least 100% or the market would have to drop 50%to consider this 
  marketanywhere near its historical mean of fair value.  I recommend 
  studying the1873 - 1896 period in US stock market and economic history for 
  a clue as towhat we may expect.  This period was a 23 year period of 
  a gradual bearmarket with many intervening boomlets.  One of the 
  hightlights of thisperiod was the tremendous volatility and bankrupticies 
  of the rails.  Onecan probably translate therails of 1873 - 1896 
  to the current day internet, telecommunications, andperhaps the airline 
  industries, which have all fell victim to deflationaryfactors within their 
  industry, just as what happened to the rails during the1873 - 1896 
  period.  Longer term, one should keep in mind it usually takes 
  decades for a bubbleto unravel.   Gold topped in 1869 and 
  bottomed in 1932.  Soybeans topped in1973 and may have bottomed in 
  1999.  Gold topped again in 1980 and may havebottomed in 2002.  
  DJIA topped in 1929, bottomed in 1932 (the exception dueto severe price 
  crash) but didn't  recover to 1929 prices for 25 
  years.Regards,Norman






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