Morning Report Tuesday 27 May 2014
I keep looking for a pullback...am I wrong or is it close?
After holidays in both the US and UK last night, I have focused on clarifying my interpretation of the "Big Picture" that is emerging and dictating my trading at the current time. From reading the newspapers, it's easy to feel equities have started 2014 with a bang, but the Dow and NASDAQ are very flat for the year with both indices up only 0.2%. Currently, the S&P 500 (the most closely watched US Index) trades at 25x its companies' average earnings for the past 10 years (data from Nobel-prize-winning Yale economist Robert Shiller;) that is relatively expensive, well above the historical average of about 16x, but still below the excessive highs of 2007 and 2000. I repeat I am only looking for 10% correction within a Bull Market that is likely to last another 2-3 years.
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