Mid 1990's? October 1929?

“Last week, the S&P 500 Index ascended to a Shiller P/E in excess of 24 (this "cyclically-adjusted P/E" or CAPE represents the ratio of the S&P 500 to 10-year average earnings, adjusted for inflation). Prior to the mid-1990's market bubble, a multiple in excess of 24 for the CAPE was briefly seen only once, between August and early-October 1929.” - February 14, 2011 Weekly Market Comment by John P Hussman, Ph.D. (used with permission of Hussman Funds - http://www.hussmanfunds.com)

 

I enjoy the Hussman weekly Market Comment because John Hussman, PhD., uses a comprehensive quantitative analysis of the market.  Clearly, his opinions aren’t based on guesswork – the numbers speak for themselves.

 

Our numbers speak too.  While we don’t disagree with Mr. Hussman, the Navigate the Stock Market (NTSM) analysis hasn’t called a SELL yet.  Some indicators have gotten worse and others, most notably sentiment, have gotten better.  Our 5-day Sentiment indicator is only 42% bulls – a fairly low number for the moment and that is somewhat bullish; however, the NTSM analysis could still call a SELL anytime.  We don’t know what the market will bring so we have to wait and see.  We can hope that the NTMS analysis will give us a warning before the correction starts.    

 

Currently, our NTSM analysis still indicates HOLD.