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Ghost of Igloi
RE: Down goes the Dow

In my mind we are not close to an attractive buy-in point. The Federal Reserve went heavy into accommodative monetary policy (QE, mortgage bond buying) closer to 12,000 level Dow or about 1,100 S&P. So there is a lot more downside risk than upside risk to this market. Look at the ridiculous valuation of many stocks that are driving the averages: FB, GOOG, AMZN to name a couple. We have seen over the last few days what can happen to high multiple stocks once investor risk preference becomes more conservative. Add to all this the more fundamental economic issues of subpar growth, along with corporate equity extraction, peak earnings cycle, higher interest rates on the horizon, leads me to ask: What is the catalyst to drive stock valuations higher?
I see more reasons to see this market headed to a cyclical low, which could easily get us to the numbers previously mentioned.


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