Stock Market
All comments and Stock Market Ananlysis are made by Guy Brumley. Guy has been trading the Stock Market daily since 1992.
Trading, evaluating stock prices and predictions
Stock Market Commentary 6-17-2009
The DOW closed down 107 to officially break the 8600 support. Do we continue down from here? If so, what is the next target?
Based on technicals, the market has 8200 as the next level of support, using the trend line drawn from May 2008 and August 2008. The 8000 level (the round number) is the typical traders support.
The technicals are weakening in lieu of fundamental data.
The estimates released by Morgan Stanley today show the fundamental picture. The earnings estimates for 2009 were raised from $40.00 to $51.00. Using the PE ratio of 14.5 from the talking heads on CNBC today, this calculates the S&P value at 743, down another 168 points. Doing the math the current PE ratio is 17.5.
The reported S&P500 earnings for the first two quarters of 2009 are $14.00 each quarter. The S&P earnings have been in a range of $13.00-$17.00 per quarter since the last quarter of 2007. The past seven quarters have been flat, and now the final 2 quarters of 2009 are estimated at $11.50 each quarter.
The estimates for 2010 are $15.00 per quarter.
This translates to 13 quarters of flat earnings, or to express it another way, six more quarters of no growth.
If the market is six months ahead of the economy, THIS MEANS 12 MORE MONTHS OF MOVES LIKE THE LAST 12 MONTHS. - Market range 800 to 1000?
This week I am still looking for a move to the upside, to at least test the 8875 high from last week, and hopefully get a chance to take some profits.
Meanwhile, protect your profits, and play the new high stocks that have room to grow their market.
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