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
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