An indicator with a perfect track record just sent a 'powerful' sell signal

CNBC ^ | 01/26/2018 | Jeff Cox

[SoCal Pubbie]

I guess your brother never heard of Thomas Jefferson.

[heights]

NBC wants a crash....

[zek157]

Nor do PE ratios matter.

[DennisR]

Well, all I can say is that since the election my stocks have gone up about 60%. And I have a fair amount invested. Is it a gamble? Of course. But what in life isn’t?

[BeauBo]

We have to have a pullback at some point after a historic 44% surge in just a few months.

The Price/Earnings (P/E) ratio indicates that stocks on average are selling for around 27 times earnings, while the long term average price is 16 times earnings. So prices are quite high now.

No doubt earnings will go up this year and improve that ratio (tax cuts goes straight to the bottom line), but itsunlikely they will shoot up 60%, to bring prices back to Earth by themselves.

The market is overbought, but not to some enormous historical degree, like some stories report.

[SoFloFreeper]

Article said:
since the firm started tracking it in 2002.

Then Red Badger said:
It may have a perfect track record, but the underlying riles of the game have changed................

Since 2002? Look, all due respect to Dubya (who has been sadly absent in his defense of the Republican Party and conservatism since about 2005), the last 16 years have been a weird conglomeration of stupid economic policy (see: Obama) and zig-zagging foreign policy (see: Bush then Obama)...all the while the Bureaucratic State has been encroaching on our freedom and liberty.

Trump, despite the establishments of both parties despising him AND the "Deep State" opposing him, has kind of changed things up.

I am not saying there won't be a pull back on the market--things always go back a bit--but this man is intent on increasing our GDP, jobs, manufacturing, and RESPECT around the world.

So let the economists predict. If they were the geniuses they think they are, they'd all be millionaires now and not pontificating in mainstream media articles about what a supposed looming disaster on the horizon. I've seen disaster: the last couple years of Bush and the entire eight years of BO.

This ain't that.

[Buckeye McFrog]

translation: Our overlords in Davos have instructed us to tank this market. It’s making Trump look too good.

[taterjay]

The old rules always apply. A pullback will happen, it will be cleansing and then up we go again. With involvement with commodities and observation of markets we hear the new paradigm argument from time to time. About the time you hear this the old rules begin to take effect again. A pullback of 6 to 10 percent will be nothing of course, unless you are so called journalistic political hack or primping, aspiring Hollywood actor/actress. To them the world will be over and President Trump cause it all.

[Red Badger]

Very................

[kaintucky]

Exactly. As soon as it drops I’ve got some cash ready to go because Trump economy isbased on strong fundamentals. A 6% pull back would be healthy. Besides When liberals blame Trump for the drop I will be able to laugh at them when it comes roaring back in a few weeks.

[billyboy15]

Doubt their model takes into account the tax reform and how the corporate tax rate reduction from 35% to 21% as well as the mult 100 billions in cash now being repatriated and injected into our economy. No predictor, especially one purporting to call the markets can ever be right at even close to the rate this one is so far withing ringing up a string of wrong calls. Will the markets pull back? Damn right! When was there ever a time a strong runup was not followed by a pull back? Fundamentals are very, very strong and barring an unforseen catastrophe this current trend will remain intact. Unless of course it doesn't.😁

[Sirius Lee]

The old rules always apply. A pullback will happen, it will be cleansing and then up we go again.

Yup. Bulls might get dinged. Bears might get some honey. Pigs will get slaughtered. But it's not going to be a "catch a falling knife" scenario. Just putting the breaks on some outsized enthusiasm for certain stocks where none is merited.

And then we're back on course to Dow 30K

[Sequoyah101]

Different times, different game than any time since 2002. Still, a correction will happen sooner or later.

What is BoA Merrill short position right now?

Yeah, buddy. I really want to take a 35% tax haircut on short term cap gains to avoid that 6% drop in what has been an 18 to 20% gain for even a conservative blend portfolio.

I think I’ll just keep rebalancing and keep my powder dry.

[Sequoyah101]

Another leading indicator both up and down is one used by the old J.M. Huber company. The indicator(s)? Printing ink and kaolin clay. Both used in printing of course. The indicator is no less viable today in the computer era than it was before computers.

[Red Badger]

They are 'talking down the economy', trying their damnedest to crash the markets by creating a sell-off panic of epic proportions.........

[speedracerx]

Bank of America? That same BofA that issued credit cards to illegals with no SSN’s (basic requirement for anyone else to apply for one)? That same BoA?

Sorry, I’m biased against that POS financial demon. I’ll say this story is likely trying to pour water on the MAGA economy.

I’m long. Any correction is a buy opportunity in my mind.

[Red Badger]

A 10% correction is expected.

In a 40% market it’s a breather.................

[Red Badger]

BINGO!..............................WE HAVE A WINNAH!.................

[Sam Gamgee]

I don’t take anything seriously that comes from anyone working at CNBC. I am surprised they still exist after funnelling the herd into the tech bubble like they did back in 2000. No credibility.

[redgolum]

I am old enough to have heard “It is different this time!” quite a bit.

Usually right before a crash.