The S&P is cheaper now than it was at the start of the year. I must be mad you say, but no, using one valuation method that is indeed the case. In January, with the S&P at 900, it traded on a 12 month trailing earnings basis of 29 times. Since then profits have increased at a higher rate than the market and the figure is now at 28 times earnings. For european investors the figure is even better as the dollar has depreciated by 10% against the Euro so the figure then comes down to 25 times earnings when valued in european "funny money."
Such figues will provide ammo to the bulls and could provide the impetus for what I would take to be the final move higher. However I believe that to see good gains we will need to see foreign investors join the party so the dollar will be an important indicator for us.
The Dollar Yen screamed through the level we gave members on friday and we accordingly have a very nice position in the Greenback. The forex market is without doubt the best market for short term trading, especially when you know where the big orders are. On friday a number of the NY branches of japanese banks took out some big stop loss levels for the BOJ leading to a very quick move higher. Traders are still short and selling more on blips. They might be right and we will accordingly trail our stop but if traders are wrong then the squeeze higher could be very nasty.
Hindsight Towers was roped off by the police this morning. My initial thoughts that I must really have p****d someone off this time proved unfounded as the police presence is due to a man in a Spiderman costume hanging off Tower Bridge. Considering that it is a good par 5 from the bridge to our base I can only assume that he really does have "Spider" powers and that he can "spin a web 8 feet size and capture thieves just like flies." A shame then that he didn't go to the Investors Expo on Friday and do a bit of superhero work there.
Harry
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