In a controversial statement, former Merrill Lynch analyst
David Rosenberg says the S&P 500 is trading around 24 times
its operating earnings. And check this out – about 760
times reported net income. 760 times!
But before you panic, understand that “net income” is
basically a starting place for discovering the true
earnings power of a business.
So what about these “operating earnings?”
Rosenberg says they’re “…earnings that are adjusted to
take out everything that is bad.”
Ouch. Seems he’s the only one who’s noticed that the
cheerleaders in the media shouting about “better than
expected” earnings reports, while corporate earnings are
31% below last year’s trough.
Okay, how does below last year’s trough translate into
economic recovery, or even the end of recession?
Rosenberg has a parting shot – since March (the market low
was March 9), the dividend yield on the S&P 500 has shrunk
nearly 100 basis points (1%) to about 2.75%.
Rosenberg seems bent on revealing the man behind the
curtain. And yet another financial writer seems to think
that the S&P is the most overextended it’s been in some
10-odd years, and due for a massive pull-back, unless
the bull-rally forces it up to 1100 first.
My take? Like everything… wait and see. Keep an eye
out for any warned-of danger, but I’m not urging anyone
to start digging a bunker.
Just make mental plans on how you will respond with your
trading, should any of the above materialize. Remember,
if the markets go up or down, our job is to profit from it.
But keeping an eye on the equities market is a huge help
to advanced Forex traders. I sincerely hope each and every
crew member watches the S&P and knows the approximate levels
on a daily basis.
How did you do with the daily levels of the Pound today?
Right out of the gate, from the New York open, it formed a
real nice evening star, and continued down for a quick
30 pips or so.
Easy money!
Now go kick some tail and take names!
Mac X
P.S.-Some of the most powerful. secretive, and profitable
trading strategies will be revealed to a trusted
handful of covert operatives, hand-picked from the
crew. October will come quicker than you think!
http://www.theinsidercode.com/forex-underground/
