Where from here
my ( desired ) prices seem to be too high ..but yes i am trying to take some cash out of the market ( but carefully , and selectively )
god luck everyone .. these are interesting times
has touched 6,983.900 so far today
doesn't seem to be in a hurry to test 7000
XJO touched 6,990.000 so far
has touched 7,041.600 so far today , i suppose the next question is will 7000 become a new support since reporting season is just starting
please take care
the portfolio value has crept up , and i have taken some profit off the table ( and still some more sell orders in the market )
i would be much happier in net earnings were improving ( as opposed to EPS increases )
i won't be really excited ( and bargain hunting ) until the overdue crash ... 2011 was good ( for me ) but i was still a novice and didn't come close to exploiting that correction properly
closing above 7000 today isn't a done deal yet
i guess much will depend on quarterly reports
it closed at a season and record high 7,041.800 points , normally a bullish sign , but tomorrow is Friday , so some profit-taking is possible ( especially since Monday is a holiday in the US )
keep that caution factor up
Stocks are the most overvalued since at least the 1980s based on one measure
PUBLISHED THU, JAN 16 202012:54 PM ESTUPDATED 2 HOURS AGO
The price-earnings to growth ratio, commonly called the PEG ratio, sits at its highest level since Bank of America started tracking the data in 1986.
“We have pulled forward some of the gains from later this year, and could see some multiple compression,” the firm’s equity and quant strategist Savita Subramanian said in a note to clients Thursday.
The current simple price-to-earnings ratio is at 18.4 times, hitting a level the ratio hasn’t seen since 2002.
RT: NYSE Traders Dow nears 29,000 200110
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 10, 2020.
Brendan McDermid | Reuters
What investors are willing to pay for stocks relative to their long-term earnings growth expectations is at an all-time high, according to Bank of America.
The price-earnings to growth ratio, commonly called the PEG ratio, sits at 1.8, its highest level since the firm started tracking it in 1986.
The general rule of thumb is a PEG ratio over 1 means a stock or a market is overvalued. PEG is a stock’s price-earnings ratio divided by the expected long-term growth rate in earnings per share.
The idea is to show whether stocks are cheap or expensive relative to how much earnings are expected to grow over time. This ratio shows either stock prices need to fall or earnings need to grow much faster than expected.
The S&P 500 has rallied nearly 9% since November, shrugging off tensions with the Middle East and tariffs on Chinese goods.
“The S&P 500 is running on fumes,” Bank of America equity and quant strategist Savita Subramanian said in a note to clients Thursday.
“We have pulled forward some of the gains from later this year, and could see some multiple compression,” Subramanian added.
As markets climb higher, are stocks becoming overvalued?
Look to Amazon and energy stocks for why there has been a pullback in earnings growth outlooks for the year, Bank of America said.
Last quarter, Amazon’s stock got clobbered when its earnings fell short of expectations. The e-commerce giant missed on its cloud business’ sales, which could be a drag on future earnings as it has provided the bulk of Amazon’s operating income for the past four years. Plus energy stocks, the worst-performing sector of 2019, are struggling to grow profits as high operating costs and lower oil prices continue to eat into revenue.
Other metrics are also near extremes, including the most common way to value stocks.
Price-earnings ratio at 18-year high
The current price-earnings ratio is at 18.4 times, hitting a level the ratio hasn’t seen since 2002, according to Bank of America. This means that investors are willing to pay more for each dollar of earnings than they have in nearly two decades. This too signals that investors are expecting a bigger-than-expected jump in earnings that may not come.
The S&P 500 is less than 1% away from Bank of America’s 2020 year-end target of 3,300.
Bank of America is not the only Wall Street firm worried about stocks being overvalued. Goldman Sachs pointed out to clients last week that the stock market relative to the size of the economy, or the U.S. equity market cap-to-GDP ratio is at an all-time high. Plus, the cyclically adjusted price-earnings ratio, created by Nobel Prize winner Robert Shiller, is near the highest since 2000 dot-com bubble.
— With reporting from CNBC’s Nate Rattner, Crystal Mercedes and Michael Bloom.
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have been looking ( and getting a couple ) for sensible exits , considering my plan is to mostly ride this out and buy a bit near a crash bottom
has touched 7,088.100 so far today not screaming higher but today is a Friday ahead of a long weekend in the US if ( say ) 7050 holds at the close that SHOULD be a bullish indicator for next week ( despite most of the market be over-valued )