There are three ways to think about the valuation of the stock market as a whole.
The first is by price-to-earnings ratios. The stock market doesn't get super-cheap until the whole thing is trading for well under 10 times earnings. Major stock market bottoms occur when the whole market is around seven times earnings.
Right now (July 6/ 2011), the entire stock market is around 18 times earnings. That's not super-expensive, but it's not anywhere near cheap.
The second way to think about the overall stock market is to check the overall dividend yield. Right now, it's 1.8%. Stocks aren't truly cheap until it's around 5% or more, so stocks are expensive by this measure, too.
Finally, there's the ratio of the stock market to the overall economy, as measured by GDP. The market isn't really cheap unless it's below 80% of GDP. Right now, the overall stock market is worth around $16.9 trillion. GDP is around $15.02 trillion. So the stock market is around 112% of GDP.
Looking at what sectors are thriving can tell us where we are in bull bear cycle.
The False Breakout: This occurs in a maturing trend. Prices consolidate, but with one last push they break out. Within 3-4 days the breakout fails. Prices reverse (Smith Barney, Technical Focus).
Trading and Scalping: (by me) Money flow indices (Chaikin Money Flow and Money Flow Index) come off peaks, confirmed by MACD crossover is a sell signal and vice versa. Accumulation and Distribution does not have to confirm.
Peter Schiff was right to call for the 2008/2009 crisis, but lost his clients money in 2008 anticipating inflation.
Sy Harding's Seasonal Timing Strategy (STS) calls for a sell signal on April 20 if the MACD is on a sell signal already, or as soon after April 20 as the MACD gives a sell signal. It calls for a similar buy signal in the fall.
Alf Field (retired) – Jim Sinclair is on board with these targets.
Requires a 950-point drop in the DJIA before 2 p.m. and will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
A 1,950-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
A 2,900-point drop will halt trading for the remainder of the day regardless of when the decline occurs.