Stock Indices

Can markets find the road back to positive territory? [There are] three reasons investors should consider [before deciding whether to] remain in equities or...sit on the sidelines, [namely that:] investor sentiment is signaling the market is over-extended to the downside, stocks are trading well below historical valuation trends and the S&P 500 dividend yields are higher than the 10-year Treasury yield. [Let's take a look at each of the three to help you come to a decision. Words: 960

We have ongoing debt crisis talks in Europe, weak housing data in the U.S., tepid growth in Germany, and higher than expected inflation in the U.K. [and, in addition to] all this "cheerful" news, the recent "death cross" that [has occurred] on the S&P 500 Index. While a “death cross” is concerning and should be respected it does not mean the end of civilization as we know it, however. [Below are the results of a long-term study that clearly defines what the short and mid-term implications are, in fact, for the market.] Words: 700

The plunge in global markets this week qualifies as a genuine panic according to the VIX index of implied equity volatility divided by the yield on 10-year Treasuries which measures how pessimistic the market is, and how much actual deterioration in the fundamentals there has been... [So,] are we finally on the cusp of "the end of the world as we know it"? Words: 437

Unless the S&P 500 rebounds and stays above 1250-1260, the recent 10% drop in the index may well be an indication that the markets have capitulated and a signal of the beginning of a renewed severe downturn. Words: 752

In a first since the bear market bottom of March 9, 2009 and the Dow Theory bull market indication on July 24, 2009, the Dow Jones Industrial Average and the Dow Jones Transportation Average have signaled the beginning of a bear market. [Let us explain.] Words: 824

Given that the financial system is now even more leveraged than it was during the tech bubble… and that we’ve added TRILLIONS in debt to the U.S.’s balance sheet...another systemic collapse [was to be expected and, in fact, was predicted by]... a stock market pattern that has occurred multiple times in the last century - and everytime it did, things got UGLY [- just like it is doing this time. Let's take a look.] Words: 422

[To say that the market has capitulated] implies that the market has bottomed and that now is a good time to buy stocks. In my opinion, that is completely wrong. The market is building momentum to the downside...[and] the odds are that the inevitable reactionary bounce is a short reprieve on the way further down. If the capitulation results in a new and meaningful uptrend (and that is a big “if”), we will see that in the charts. Words: 552

At the beginning of 2011 USA Today reported...[that] Ned Davis Research says the S&P 500 will make a run at the 2007 high of 1,565, hit a “midyear peak” [and] then it will crash as interest rates rise...concluding that “the midyear peak could mark the end of the cyclical bull market that began in March 2009 and the start of a new cyclical bear market.” Words: 637

To move up from the current 12,600 level to 20,000 by the summer of 2014, the Dow would need to rise about 16.5% each year or about 58% in a three-year period and in the past 25 years the Dow has risen by this much on at least 13 occasions. During those times, there was only one period of sustained annual gains, when the Dow rose an average of 26% from 1995 through 1999. The key question: what would it take to justify a three-year, steady, robust gain? It all comes down to corporate profits [and the extent to which] multiple investors are willing to assign [dollars] to these profits. [Let me explain.] Words: 761

The S&P 500 is considerably overvalued - somewhere in the range of 34% to 61% - depending on which of 4 market valuation indicators are used and whether the valuation is based on the arithmetric or geometric mean of each. While these findings are not useful as short-term signals of market direction...they play a role in framing longer-term expectations of investment returns and suggest a cautious outlook and guarded expectations. [Here are the details.] Words: 676