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  • Too Late to Short SPY? An Historical Perspective [View article]
    jlounsbury59,

    Thanks for the reference to your technical analyis. After what could be a bear rally, we're heading down rapidly toward your level 2 support level. What's your take tonight?

    Ron
    Oct 23 00:01 am |Rating: 0 0 |Link to Comment
  • Too Late to Short SPY? An Historical Perspective [View article]
    Smarty Pants,

    I agree, no need to be in a hurry to go back in long, just play the short side for a while -- we're now below the mean, but it's unlikely to stop there. Perhaps one sigma below the mean? That would take us to 604. How about 1 1/2 sigma?

    Ron
    Oct 22 23:56 pm |Rating: 0 0 |Link to Comment
  • Too Late to Short SPY? An Historical Perspective [View article]
    No Free Cake,

    You're right, lowered earnings for a year or two don't pull the 10 yr average earnings down by much. The main point of the article (which I may not have made a clearly as I should have) is that if the economic times we're heading into are really as bad or worse than the early '80's, then it's not unreasonable, as a "value investor", to think that the PE ratio could go as low as that of the early '80's, which would bring the SP500 down into the 400 range.

    Thanks for the comment,

    Ron
    Oct 22 23:49 pm |Rating: 0 0 |Link to Comment
  • Too Late to Short SPY? An Historical Perspective [View article]
    Matt,

    Sorry for the delayed reply. Here's the site for the latest SP500 earnings data:
    www2.standardandpoors....

    You can download an excel spreadsheet with the total SP500 earnings as well as the sector breakdown. Then use the same smoothing formula that Shiller uses in his spreadsheet. Note the time delay.

    Ron
    Oct 22 23:45 pm |Rating: 0 0 |Link to Comment
  • Too Late to Short SPY? An Historical Perspective [View article]
    Muzie,

    Thanks for the comment. As I pointed out, we all know that markets move on a combination of factors -- fundamentals, sentiment, earnings projections, overall world and local economics, etc. The fundamentals are that PE is still historically high and that earnings estimates are falling. Additionally, sentiment suggests things are as bad or worse that the early '80's and world economics are being bludgeoned by the credit and banking crisis.

    Given that, is it out of the question that we hit PE ratios similar to the '80's? No, and that suggests SP500 in the low 400's. If it's as bad as the '30's, then it's in the mid 350's.

    After writing the above article, I went long with ultra etf's for a while. Then went back to ultra short etf's as the "bear rally" looked to be running out of steam.

    Ron
    Oct 22 23:36 pm |Rating: 0 0 |Link to Comment
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