Unexpectedly Intriguing!
June 27, 2013

Remember our chart from last Friday, 21 June 2013 - the one that we said wouldn't be sending a "sell signal" until sometime in the next week?

Well, here you go, as we update our chart through Wednesday, 26 June 2013. Now what will you do?

S&P 500 Index Value vs Trailing Year Dividends per Share, 30 October 2012 through 26 June 2013

If it helps, what this chart is really saying is that the period of relative order in the market that accompanied the rally that really got underway after 15 November 2012 is over. With the 20-day moving average for stock prices having now moved outside the outer limits of our "normal" target range for this period of order, we can say that the data points falling outside this range aren't just outliers for an existing trend, but are rather evidence that the previous trend itself has broken down.

And yet, the question remains. Now what will you do?

If it helps, let's zoom out and look at the larger scale trend for stock prices. The one that has existed since stock prices stabilized onto an overall upward trajectory following the aftermath of the end of QE 2.0 (our first chart focused on just the region of this chart within the purple rectangle):

S&P 500 Index Value vs Trailing Year Dividends per Share, 30 June 2011 through 26 June 2013

Well, that didn't help much, did it? Well, how about this. Our favorite indicator of distress in the stock market, the price-dividend growth ratio (the "G-ratio") appears to have peaked this month. Typically, when that happens, stock prices will go on to hit a significant trough within the next three months, falling from the average level of stock prices for the month in which the peak in the G-ratio occurred.

Now what will you do?

Labels: ,

About Political Calculations



blog advertising
is good for you

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Applications

This year, we'll be experimenting with a number of apps to bring more of a current events focus to Political Calculations - we're test driving the app(s) below!

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

Visitors since December 6, 2004:

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links
Charities We Support
Recommended Reading
Recommended Viewing
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.