Saturday, July 22, 2017

Is market peaking?



It is hard to determine market peaks and bottoms. Otherwise, there are no poor folks. Based on previous data, I tried to predict (again predict) whether the market is peaking.

From my previous findings:
Table: Market Plunges

Market Plunge
Months
(Peak to Bottom)
Loss
Annualized
Loss
2000
17
56%
40%
2007
25
47%
23%
   Average
21
51%
31%

Table: Vital Dates

Market Plunge
Peak
Bottom
Indicator
Exit
Indicator
Reentry
2000
08/28/00
09/20/02
10/30/00
05/26/03
2007
10/12/07
03/06/09
01/03/08
09/08/09


My test data are using SPY from 1-2000 to 2-2014 to get the averages of the peaks. The following is from my own interpretations. Again, past information does not guarantee future performance. It just serves as a guideline.


SMA-50
SMA-200
SMA-
350
SMA50/
SMA200
RSI
(14)
Market (SPY)





 Peak (avg.)

5%
9%
101%
65%
 7/4/2017
0%
6%
10%
N/A
50%

Both SMA-200% and SMA-350% are in par with the averages of the previous two market peaks. RSI(14) shows the market is overbought but it is 15% less than the average. I missed some parameters such as P/E. The P/E as of 7/4/17 is 25.69 and about 71% more expensive assuming the average is 15. The average of 11 stocks from Fidelity’s best sector list increased by only 0.35% for last month. So, it is not a good sign.

Fundamental metrics (07/20/2017)


L.T.
Avg.
7/20/17
High by1
Min
On
Max
On
P/E
15.66
26.17
67%

5.31
12-1917
123.73
05-2017
Shiller P/E
16.76
30.12
80%
4.78
12-1920
44.19
12-1999
P/Sales
1.45
2.15
48%
0.8
03-2009
2.15
07-2017
P/Book
2.75
3.22
17%
4.78
12-1920
44.19
12-1999









1 High by = (Current – Mean) /Mean

The market is fundamentally over-valued as indicated in 07/04/2017.

Picture in investing



The mule hopes it would be hard landing