Daily S&P 500 INDEX TRACKER

[Hoop]

S&P500 (Wall St) holding up despite falling earnings is said to be because the market is forward looking and sees this drop in earnings as a temporary blimp and the next company reporting period should see a rebound and a recontinuation of the earnings upward trend.

So..Just released 30 minutes ago is this news of the Philly Fed index dipping again in May -1.8..this could be viewed as a kick in the guts...lets see how the market responds..Note: - Wall St is still on the edge of a Technical cliff

[Hoop]

Since my last post...
My sentiment indicator never fired the required all 4 sell signals
The S&P500 has stepped back from the Technical cliff edge and testing the Dow Theory definition of a bull trend (trying to create a higher high). Closed at 2096
However the S&P500 testing to create a higher high today (trying to break resistance) has resulted with an appearance of a bearish candlestick.
A very simple quick and nasty candlestick rule for Dummys.. tails at a price high is bearish, tails at a price low is bullish.

Below is a link to 27th May 2016 Factset earnings insight PDF file (29 pages)..
Quote.."....with 98% of companies in the S&P500 reporting earnings to date....."
It seems the Q1 earnings have come in better than expected...-6.7% ...the estimate was -8.8%

For the Dow Theory buffs.. page 1 chart is interesting..typical fear (pessimism) and greed (exuberance) example

[winner69]

@Macr0man: You know the market's addicted to monetary crack when it's at its highs, there's a 5 SD miss on payrolls, and VIX goes down

[winner69]

The low (and surprising) jobs numbers were probably 'managed' to keep Janet from raising rates in near future

[winner69]

The low (and surprising) jobs numbers were probably 'managed' to keep Janet from raising rates in near future

And its working --- getting close to an all time high

[winner69]

Some on this thread probably the "emotional" type

@RBAdvisors: Emotional investors might miss an earnings-driven bull market; https://t.co/gKaraBsNhz

[Aaron]

Some on this thread probably the "emotional" type

@RBAdvisors: Emotional investors might miss an earnings-driven bull market; https://t.co/gKaraBsNhz

Me definitely, too lazy to research. although I only skim read the link did RB give any reason why they are bullish on company earnings.

[kiora]

Some on this thread probably the "emotional" type

@RBAdvisors: Emotional investors might miss an earnings-driven bull market; https://t.co/gKaraBsNhz

Good post W69

[Hoop]

Hmmm...Another advisor to add to the collection of investors that makes up Mr Market.....Mr Market has the S&P 500 PE Ratio at the lofty heights of 24.22 and a 12 month forward PE of 17.81...Mr Market is obviously very bullish (or is it exuberish) about 2016-2017 earnings...Yet when we look back in hindsight to 2014 2015 2016 predicted forward earnings they have been devalued downwards with each future Quarter..If this tend continues it seems 2016 -2017 quarters should be no different as history shows over earnings value (optimsim) at top/start falling cycles and under earnings value (pessimism) at bottom/start rising cycles...I personally don't think Mr Market has factored in this possible trend....also...tell me whats wrong with a falling PE Ratio with a rising earning..Nothing!!..Its healthy for the market long term (prevents crashes)..however a healthy PE fall from 22 back to 18 with the predicted rise in earnings may upset some people (e.g Richard Bernstein) as the S&P500 may stay around the 2100 for another year...quashing his earnings fueled rally..however this is only one scenerio using earnings PE Ratio variables..We can change the figures of these 2 variables to produce other scenarios which could equally just as likely happen.

Question:..Being optimistic and using this predicted earnings outcome, will the S&P 500 go up with the so-called increased earnings?

Answer :..After my comment above the answer is yes, no, maybe...Lets look at it this way..At yesterdays close the PE Ratio of 24 is well above the average..its considered well overpriced..the only reason it's sustaining this high level is due to it's primary driver called inflation being in the sweet spot of ~1%...Even being within this sweet spot, if the S&P500 goes much higher it will be traveling in the PE~25 "cyclical reversal" zone where history says the bull always dies..Looking back into Richard Bernstein's past writings he always mentions that "this time" is never different..interesting thing too I can't find anything on his advisory firm before 2009 at the start of the Wall St Bull market cycle...I maybe too harsh, but from what I've read on some of his twitter account..he seems very bias as if he has a "set in stone" attitude.. he dismisses all the bad news without thought and embraces all the good news like a reinforcing of his personal belief that USA is going to be just fine and dandy for the next few years..this attitude of his has worked for 7 years and..OK this could happen for the next 7 years..but at least we should analyse all those very black clouds on the horizon and have contingency plans in place..eh....just in case a black swan poops on you..and if you're luckily dodged the poop then you may not be as lucky with the on-going bear fight to follow ..right?

We all know about Bull market cycle reversals...They don't happen overnight..they linger.....We all say the market is fundamentally overpriced but the market keeps going up..and up ..and up..and one by one the fundamental bear commentators (including me) get discredited..Interesting thing I read today was Brian Gaynor article in January 2015 that the Auckland property prices were overvalued and a cause of concern (possible crash)..17 months later..it's 20% higher and still frothing..He did say it could take a while to correct...

At least Brian Gaynor is a smart guy and is aware and comments on possible downsides to overvalued markets..My feeling about Richard Beinstein is sadly different..

Changing track slightly towards overvalue markets...I have a lot of time for Prof Robert Shiller and his PE Ratio measurement is a bet measurement of market valuation...His reputation has seen better times too due to these well overvalued markets taking a long time to correct...The Shiller P/E 10 is (as of 9th June 2016) at 26.4 +58.1% higher than the historical mean of 16.7****...That is scarily overvalued stuff..the only other times in the last 140 years this 26 level has been reached or gone higher was 1929, 1998-2001, 2005-2007, 2014-2016..we all know what happened back then..

****..may need to subscribe to this site

Completely off track..Shiller also values US property market....the US property crashed back to "normal" (still too high?) levels came as no surprise when looking at Case - Shiller Home price indices chart...eh!!...However that market lingered on for 7 years in uncharted over valued range before it crashed...Still some rises to come for Auckland and NZ Property market??...yes, no, maybe

[Valuegrowth]

http://www.bloomberg.com/news/articl...next-big-buyer

Hedge Funds Trailing Stock Rally May Be S&P 500’s Next Big Buyer