Friday, July 23, 2010

Euro/Stress, and What is the real PE ratio, and what is the game that is on?

The Euro Bank stress test....they played that perfectly.

If the results were too good, they wouldn't be believed. So 7 out of 91 bank representing about 70% of all bank assets were found to be shaky, needing just a few billion Euro to make things right.

If they results were too bad, there would be panic. They played this perfectly, they are learning how to control statistics similar to western countries in order to promote stability. The "Business Cycle" is so old school, who needs it? We can just use statistics and marketing to get around that pesky little thing called the business cycle.

With horror, I go into the weekend completely flat except for some longs in Nat Gas and Gold/Miners.


Comments below from the blog---

Nice work, Steveo. Since the majority of the shorter term timeframes now point up, should we expect to give a good majority of today's gain back tomorrow?

Lately, it seems the more indicators in alignment pointing in one direction, the stronger the move in the opposite of that direction.

steveo77 [Moderator] 11 hours ago in reply to Ben
Monday is supposed to be a massive "turn date", turn which way you say? Well the real P/E ratio is somewhere around 70 to 90, so fundamentally we should turn down....but it is easy to be way wrong, months or years ahead of time.

These last few weeks are just ramping up and down, changing asset classes, HBB playing with their clients money as they hand off the lousy assets to state pension funds, their own mutual funds, client accounts...all with an excuse built in...."we took the trade on technical merit, but it went bad.....all of them....but now the market is even more on sale....are you ready to put some money to work?"

I believe that is the game playing out. Intraday could be very tradable, position trades need cajones of Tungsten and ability to absorb large losses if your theory is wrong.

P/E 70-90? And bear markets take that "real" P/E number down to what before all is said and done? Single digits?

I agree. Even 1-3 day swing trades are too long of a holding period.

steveo77 [Moderator] 0 minutes ago in reply to Ben

P/E should go to single digits, but this is going to be a primary wave 3, maybe even a super cycle wave in Elliot terms, so it could go to 8 or 9 or even 5, say. My target for S&P 500 is 200.


  1. it has been an intresting week. And I did well. Just started following a guy in OZ. he called the crash in 2008 and is now has some very intresting calls for the coming months, and is spot on from what I can tell. Worth a look.

    There is something strange in the air, i can smell it. I still cant put my finger on it.... hope it doesnt mean i lose my account next week. eeeek.

  2. Please don't post a comment that only pimps out a pay site. We welcome comments, and commercial site are OK, but we don't want to see links to any sites that only require payment. mahalo!

  3. Sold my long today. Mon is a full moon, and we are very close to Crawford's 8/1 meltdown.

  4. dnarby, who is crawford

  5. I thought the big confluence of events was for 8-26-2010? Just saying......

  6. How is that running for office thing coming so far?


Insightful and Useful Comment!