S&P 500's Next Move Likely to Be Down？
The $S&P 500(.SPX)$ price to sales ratio is now only as expensive as during the peak of the dot com bubble!
"Buffett Indicator"the Universal Valuation Formula also now all the way down to dot-com bubble levels.
What does this mean to the current market? Looks like it's going to bounce? Will here be a support？
While nobody values the S&P on a price to sales ratio. As most internet companies had no earnings in 1999/2000. While companies gushing earnings now.
We need take a look at the PE ratio.
From the chart we can see small cap forward PE ratio back down to earth, but latest earning season, 75% companies' EPS deliver are on analyst expectations...
$S&P 500(.SPX)$ Forward PE still elevated relative to prior bear market lows (2002, 2009, 2011, 2015/16, 2018, 2020)
In Dec 2018, $S&P 500(.SPX)$ was bottomed around14X Forward PE which is 20% below current level.
The index is currently slightly below it's 5 year average and slightly above it's 10 year average.
The biggest discount the PE traded to its 10 year average since 2000 according to our stats at major lows as below：
3/2020: -17%
12/2018: -8%
10/2011: -30%
11/2008: -46%
10/2002: -27%
9/2001: -17%
The low last week was -3.5%.
Do you think the next major move likely to be DOWN？
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