Another subject but somehow related. Check out YHOO. This little devil. Don't try to compare it with GOOG or .... Expect a $1 to $2 pop in two weeks.
You can crunch all the numbers you want , there just is no reason for market to rise. Too many iffy situations across the board .Market has to break hard , clean out the weak and build a solid base. If you look at the broad market , you will see most stocks are still weathered and the only stocks that have recovered and done well are the high fliers that make up the Dow . I think market is artificially stimulated.
I remember in 1999 when all tech stocks had P/E of over 100. Now check the P/E for AAPL, TXN, INTC, ADI, ALTER, XLNX, GOOG,.... 90% of them are below 20. Market is in its cheapest level in a decade. All things said, I don't see over 10% from where we are now.
Although you are correct in your P/E reference , there are many other factors which weigh on the overall market as opposed to 1999 .In 1999 we had $17 a barrel for crude , dollar was stronger and commodities in general were much lower as well .
It's a no brainer, as long as interest rates remain at record lows pullbacks will be bought. You can complicate it all you want but that's the truth of the matter, Bernanke is forcing investors to go the dividend way or in cases where the stomach is strong, more volatile equities; either way the Fed is in command, follow big money, they are the biggest money. News cause upside and downside, nothing new here but the overall trend whether you like it or not, understand it or not will remain up as long as Bernanke wants it up. No reason to complicate it.
The bull market in bonds is about to end though... Initially it will be risk on in stocks but seeing as stocks are propped up by government money spending and a bear market in bonds removes the ability for governments to inject liquidity the initial positive reaction that results in new DOW highs will turn quickly negative, maybe in a years time?
The Dow is down 6 days in a row now. That's nothing compared to last summer where the market was down something like 8 straight days and 10 out of 11 days.