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Tuesday, December 7, 2010

Market Thought... normalcy

The 10 yr pushed up today, despite the market loosing the floor at 2:50pm.

As I mentioned yesterday, 2010 SP500 earnings will be north of 86eps. The SP500 usually trades with a multiple of 15, putting a target of 1290 on the SP500. (I am also using 15 because end of the year we look forward to next year earnings potential. So the multiple should be higher, but I will settle with the historical average PE.)

2011 SP 500 earnings will be around 93-94 eps. A multiple of 14-15 will give an SP500 trading range of 1,302 - 1,395.

So, if the market consolidates this go around, I will be a buyer.

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