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Richard's Remarks


Let's start with this chart of the Dow. Despite all kinds of optimistic chatter, the Dow does not look that healthy. As you can see on the chart, the Dow is rolling over and is just above its 50-day MA, and the critical large, even number -- 15,000. I believe that if the Dow breaks below 15,000, that will be the beginning of a change in investors' sentiment to the bearish side.


Most investors fail to realize it, but the big mover in markets is what people are willing to pay for earnings. This is the price/earnings ratio. Right now investors are paying a bit over 19 times the trailing earnings for the S&P Composite. This is a steep price for S&P earnings. It tells me that investors are now very optimistic, and would take any reversal in earnings as a bearish surprise.


Getting back to the Dow, I see that RSI has ... Log in or subscribe to continue reading.

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