What are the S&P500 12 weeks forward return after down 5 consecutive weeks?

 What are the S&P500  12 weeks forward return after down 5 consecutive weeks?

 

Source:Steve Deppe (@sjd10304)

Jeremy Grantham says U.S. stocks are in a “super bubble"

“A two sigma is the kind of deviation that should occur every 44 years. Because we’re a little wilder and less efficient than we should be,it happens every 35 years. Every 35 years feels about right…one event in a career and twice in a lifetime.

Three sigma events should occur once every 100 years. Now we, as I like to say, do crazy pretty well as a species. Therefore, three sigma events occur much more often than they should, and they are out of kilter much more than two sigma events.

With two sigma events, you can have some reasonably standard bubbles. They give you a certain amount of pain in the minus 30, 40 to 50% area. Super bubbles can pretty much wipe you out like 1929. And that’s where we are now.”

– Jeremy Grantham,

Co-founder and Chief Investment Strategist of Grantham, Mayo, & van Otterloo (GMO)

 

 

"From an investment perspective, the picture to me is clear. Hedge long-biased equity exposure and/or raise cash. When the market reverts to the mean (the dotted blue line), that is a point in time when we can expect average nominal returns in the +/- 10% range. If you are sitting on a lot of cash, remain patient. The average trend line is around 2,500 in the S&P. That’s a pretty good target."---Steve Blumenthal

Source 

My Key Take-Aways From This Powerful 96-Years Return History For Common Stock Charts

My Key Take-Away From This Powerful 96-Years Return History For Common Stock Charts:

 

1. All in the beginning of the new year when the last year returns down more than 30%.
   For example,  Y2008 followed by Y2009 up more than 20%. Y1974 followed by Y1975 up more than 20%.
   
2. This Year Y2022 return will be worst than Y2021 (Less than 20%). This chart shows that none of the yearly returns will be better than last year when last year's return was up more than 20%.

 Source

S&P 500: When To “Fold” And When To Go “All in”

 

Great S&P Historical Information For Reference

 

Great S&P Historical Information For Reference

Source:https://www.advisorperspectives.com/dshort/updates/2021/04/05/a-perspective-on-secular-bull-and-bear-markets

Why US Market Sitill Not In Bull Market

From 26-Jun Breakfast With Dave ;

From last market plunge on Jun 11th , every day VIX has closed above 30 ( At 32 currently ). This is red flag as from the above table, When the VIX is over 25, the stock market tends to Drift lower over time..

With VIX currently at 32, the average monthly S&P 500 monthly change is Negative 1.1%.

Hign Win Rate System Trading S&P 500 Monthly Chart

Another Good Approach : When To invest S&P 500 ?

                                                                        Source from variantperception
Conclusion from the chart, whenever markets have declined over 30% from the 3 years moving average ( Green Color ), that has usually been a very good buying opportunity

Is S&P 500 Over Price ?

Is S&P 500 Over Price ? Let do a Simple Analysis:

Following is a history of earning from NYU published the chart below on Jan 5, 2020. Please take note Y2019 actual earning is $139.4 and not $162.35 the forecast predicted

What happen in 2008 subprime crisis ? it drop from $82.54 to $42.51...33.9% !

This year most likely it will drop more than Y2008 33.9%, but let assume we just use 33.9% drop from Y2019 earning of $139.4 to estimate this year earning. 

The projected this year earning will be $139.4 - ($139.47*33.9%) = $92.3

Refer to the S&P 500 PE Ratio - 90 Year Historical Chart,

Let use 14 PE to estimate the S&P 500 fair value.. 14*92.3 = 1292.

Today S&P 500 Price 3041

You can estimate S&P 500 next year earning and PE, and decide yourself at what price you think is value investing..

S&P 500 PE Ratio - 90 Year Historical Chart