It's Different this time?
Demark Red 13 and Green 9 sell signal
It is different this time. Old market investing and trading rules are no longer applicable. As Dan Niles (not a fan) recently opined, “valuation doesn’t seem to matter” or something to that extent. Keep buying until some magic date by Thanksgiving and the market will drop 20% he said. Ok then. He kinda always says he likes em but they should drop 20% ahead. Anyone actually see Dan’s numbers? Ok, this isn’t about Niles! The market really has ignored some basic investing tenants the past few years such as the market P/E usually has some relation to the bond yields one can earn in fixed income. Nope, that seems gone as a tool. In fact, P/E is almost not relevant as many just use price to sales ratios since there is nothing but a wide range of possible here, 5x, 10x, 20x? What is the right P/S ratio is not something I have ever seen analyzed logically by almost anyone claiming the value has any relation to a discounted cash flow.
The put call ratio developed by Marty Zweig used to be an amazing tell. Right now it sits at 0.57x which is about as contra an indication as you can find with the last time it being this low was February 18th before the mammoth decline happened. Hmmm.
I was struck Thursday by the QQQ signaling a long term red 13 price exhaustion signal on the daily charts and a green 9 about to follow Monday on the short term Tom Demark TD Sequential study.