Why The Casino Is Dangerous: There Is Nothing Below

The algos and chart traders have succeeded in their run at 2000 on the S&P 500, and are now attempting to convince the wary investor one more time that buying on the dips is a no brainer. And in that proposition they are, ironically, correct.  To buy this utterly manipulated market at these nosebleed valuation levels is about as brainless of an undertaking as is imaginable.

Now we even have it in a back-handed way from Deutsche Bank. Its chief strategist, David Bianco, claims that the S&P 500 is now trading at 17X reported trailing earnings and that historically when the multiple has gotten into that zone after three years or more of market gains (we have had five) good things do not happen.  But, yes, this time is different according to perma-bull Bianco because even though above 17 PEs are rare after many years of EPS growth, very low interest rates are even more rare and support higher PEs: (more)

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