I think my statement with regard to market valuation only makes sense if one corrects for inflation. Thus this argument can be used by those wanting to make a case for higher index values. I believe even Morningstar, with their typically conservative valuations, stated a while back with the S&P a little higher than where it is now that they saw the market as fairly valued, i.e., not overvalued. My personnel viewpoint is a little different. I believe that the amount of liquidity pumped into the economy in Greenspan's last years was so extreme, and that the subprime crisis that resulted from this, will outweigh, in the short run, all other factors affecting the market. I and many others have said repeatedly that this will be the most serious real estate-building-credit industry collapse in our lifetimes. So from my point of view it would be ludicrous to think we could get by with only an 8-10% correction. I see the recent emergency action of the Fed as confirming. Today should open up and then we look to see how quickly the gap fills.
so..... is it program trading the other way today or what? we saw an inverted 2-day h&s on sp500 today break its neckline. where are we going from here? we see another inverted h&s on a 2 month graph with a neck around 1470-1480 with potential if it breaks it.. back to record levels around 1550. That s TA. time will tell.