Where do you think the Dow will bottom out?

[Occam Bandage]

Poll question: Where do you think the Dow will bottom out?

[Occam Bandage]

1. kick to keep getting votes.

[Occam Bandage]

2. votes ahoy

[phantom power]

3. I think it depends on when (or if) the credit crash hits bottom and restarts.

I voted "7000," but "below 7000" was a close second.

[BootinUp]

5. What we are seeing is a demand from investors

to completely reform the system.

[Occam Bandage]

4. kich.

[sandnsea]

6. 8,000

It's been over-valued since the dotcom days.

[Parker CA]

7. 7500 +/- 300 n/t.

[BootinUp]

8. Wow just crashed throught the mythical 200 Month Mov Avg barrier. nt

[On the Road]

9. It's Still Overvalued

but reaching the top of the historical valuation range.

There was a Dow bottom around 7500 in the late 90s. That sounds like a good support point.

[Davis_X_Machina]

11. P/E data viewed historically...

...suggests a level between 7500 and 8700. I had the high number.

Lowest recent bottom: 7,702 on 7/23/02.

Biggest pullback -- 90% in the 1929 crash -- that's Dow 1500.

[On the Road]

14. I Check Out Carl Swedlin Frequently

He's a pretty good technician and looks in terms of long historical trends.

Based upon 2008 Q2 GAAP earnings the P/E of the S&P 500 is about 21, which puts it slightly above the normal P/E range of 10 to 20, meaning that stocks are very overvalued (the exact opposite of being a bargain). To demonstrate, the chart below displays the S&P 500 in relation to its normal P/E range going back to 1925. The S&P 500 is the heavy black line, the red line shows where the S&P 500 would be if it had a P/E of 20 (overvalued), the blue line is if the P/E were 15 (fair value), and the green line represents a P/E of 10 (undervalued).

http://www.decisionpoint.com/ChartSpotliteFiles/081003_value.html

Long-term valuations may change over time. It's dangerous to make any assumptions. But there's no reason to think we're near a bottom.

[prayin4rain]

10. your user name is hilarious! n/t

[gravity]

12. I think the bottom will be today or tomorrow

[Kurt_and_Hunter]

13. The spike bottom will be short-lived, so the number is ???

It may drive through 7800 for all I know, but the immediate rebound will be a buying panic so the bottom-bottom will be more an event than a level.

[Occam Bandage]

15. Hmm. Due to the continued slide, options 1 and 2 are now virtually identical.