As for the whole issue of the market pricing in slower growth.  This is a tough one.  I cannot disagree that the market could, and perhaps on a sentiment "disconnect" alone, should go lower before any sort of comfort factor can set in regarding stocks.... but on valuation?

The price to earnings multiple presently on the S&P for operating earnings is now 14.8 using 2nd quarter earnings (figures here taken from Briefing.com).  Now assume an earnings growth of rate as low as 5% going forward.  Which is low compared to our recent dbl-digit rates.  Even at 5%, with the interest rate cycle peaked, stocks give good value.  Again, stealing from Briefing, the earnings yield on stocks (E/P) is 6.8%.  That's pretty solid.

Now, that doesn't suggest the market cannot go lower or experience increased volatility.  But make your own call.  A huge implosion in the markets longer term would have to be externally driven.  Not based on valuation/forward growth.  More likely we trade in a range until visibility gets better.

Great stats, 6.8% earnings yield has to get those who are excited about earnings yield buying this ugly tape...LOL

Haha yea, not going to happen until things die down.  This is pretty volatile trade though.

VIX has calmed down from the end of May beginning of June.  Nasdaq'shigh today couldn't get to yesterday's open...pathetic!

Quoted from mac

It's frustrating though to short right now too because everytime it looks like things are going to finally crack, we get a rally like today.   It's hard to find patterns right now that behave the way I expect them to, especially in the commodity areas.   They look like they're about to breakdown, but then just when you expect them to, they rally back up.   Maybe it is just going to take more time.   But it's frustrating.  

Bear in mind there is only one and half day to go to the month end, need to paint the number.  We have a great trend line battle now.  TRAN break 200sma, if you look at long term trend line, it still holds just about there.  1260 will be the spx line for spx monthly data point.  Wall Street will do anything hold the one in order to avoid a sell signal

Market players are often a very impatient group -- they want gains and they want them now. They are often unwilling to sacrifice good action today for a more desirable longer-term technical setup. That is fine if you are a daytrader or flipper, but if you want to build substantial longer-term positions it is usually better if the market builds support and then stair-steps higher with plenty of consolidation along the way. This allows stock to move into the hands of stronger longer-term holders who are less likely to run at the first sign of weakness.

Be careful about earning unless you buy the whole index, the earning is IFLATIONARY, the top sector earnings are OILS, industry, helthcare, if you take out these ones, you will have a different P/E.

In addition to earning, the market is driven by interest rate and human emotion ( can be very irrational )

yes i heard all the comments about SP near 10yr valuation lows,etc....but problem is its not relevant if earnings slow(Q2 earnings are yesterday's news)....i am NOT saying we will see some huge bubble meltdown like dotcome b/c US company balance sheets have record cash on the books but buying investments based on P/E is not an effective way to make money in stocks because price already reflects current earnings but charts breaking down shows future "forcasted" earnings probably will be lowered...and no one can guess how much downside there will be, just have to wait and see.....ps- inflation this morning was NOT GOOD so who is to say rate increases are done. i dont know and neither does any economist out there so i am sticking with the charts........ps - i learned the hard way to not invest based on P/E or any other Price/sales or discounted Cashflow or whatever else, its not a reliable way to make money in stocks

will be interesting to see what big money does in last hour trading today will it sell off again after A.M. bounce ?......anyone want to make any bets

The earnings/valuation data I posted was more a reply to the notion that the market currently hasn't priced earning slowing into market valuations.  The truth is the market isn't moving on anything but sheer sentiment at the moment.  The by-product of that though is that it has inadvertantly priced in a relatively stable pre-adjustment to earnings down to the 5% growth level.  This is merely a tool; certainly not a buy signal.  Who is to say earnings will go to 5%?  Maybe they don't go that low?  It's all theoretical.

I invest in individual names anyway, and not the broad market or calculations on broad market earnings.  However, it is a useful statistic.  It is also a sentiment forecasting tool.  You can bet your ballsacks numbers like those will be the ones cited when market fears subside.

i won the bet against Josh and market spec calling for an up week on SPX
big money wont be here for the last hour today its a summer friday did you forget?
rather you will have to wait till monday or perhaps tuesday

I'll bet a million dollars that I have no clue.   The data this morning was not good, yet we're up 100 points.   Who knows what's going to happen?    Action looks a little stronger than it did yesterday.   S&P500 very close to taking out yesterday's high.   1280 will be a key number because it would me a higher high.  

Days like today, after yesterday where everything breaks and turns every chart ugly, is why I say it is best to be in 100% cash. Even though my trades are small having the market act like this when everything tells you it shouldn't is just depressing.

The bigger problem is all charts are still broken but this rally after such an ugly day can only be taken as bullish. What a confusing messed up market.

Stay in cash!

I am going back to bed for another two hours. Hopefully we are not up 60 points on the Nasdaq or else I will be very upset and will probably purge a lot of shorts this weekend.

God, it is so f*ck*ng stupid trading these kind of markets. The big money is never made here. You only make your broker richer.

remember the crowd says you have to trade...in these cases the crowd is never right...STAY ON THE SIDELINES!!!  Charts are all over the place...its seesaw action, very, very, very, did I mention its very hard to be successful in this market?  Stay with the history, big money is not made in choppy markets.

onward and upward we push killing the shorts