Doug Short created the upper left chart on the Q-ratio and updates it on a regular basis. See latest “Q-Ratio” update and detail of this ratio (HERE)

Being a student of Sir John Templeton, I have to look at some fundamental valuations every once in a while, especially when they are hitting extremes. The above chart reflects that the Q-Ratio is 60% below the highs reached in late 1990’s. 

If you happen to exclude the 1990’s time frame, the Q-ratio is now within 10% of the highest valuations reached in the past 100 years, where the Dow found it tough sledding going forward.

6 months ago, I shared that “Infinity Ben” could push the Dow to 16,000 (see here)  We are now less than 1.75% away from that target, which is the crossroads of resistance at (2) above!

Has Infinity Ben & QE programs made the “Q-ratio”  useless? I don’t think so!

From a technical analysis angle the following seems to be important in my humble opinion… Resistance is Resistance until broken!  Should buyers push the Dow past 16,000, we would have a positive unique breakout on our hands!


How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past