SPX EPS (From Big) and 4 Important date in 2008

SPX recession PE is 12. Some say 10, This week on avg many companies slashed guidance by 30-40% including many retailers. SPX 2009 estimates are like $90 now. Reduce it by 30%. SPX earnings $63 (60-70) x 12 PE = 756 fair value. Slap a 10 PE will get 600 on SPX. So as of today SPX is overvalued 15%.

12 PE x 70 - 840
12 PE x 60 - 720
so current fair value for SPX is 700-800

1000 is overpriced, that's why 1080 gap is not going to fill for months or years
if it ever gets to 1100 on some short squeeze it is short of lifetime

There are 4 major cycle dates for 2008:
Jan 28, (We know what happened prior to that on 1/22)
March 20, (We know what happened prior to that on March 17th)
June 18, (We know what happened prior to that on June 16th)
Nov 18, (so far we have 11/14, 11/18 is Tuesday before OE 11/21)

Overall:
The bear market rallies are getting short in 1 week or so events.

When this market does really bottom at 2002 lows or lower, it will go sideways for weeks/months and rally 30-40% in over 6-12 months.
Basically market will reach an equilibrium at some lower level where vix will settle at 20-30 (reversion to mean) and market will accept a price of 600, 700 or 800 and trade on fundamentals at that point.

there is a 75% chance we print ~7xx on SPX this year.

Prediction:
600s in early or mid 2009, a rally to 900s in late 2009- early 2010, retest of 600-700 in 2011 and then end of bear in 2011 or 2012.

GS, MS, C one or more of them are going BK in 2009

The real bottom is when AAPL breaks down and trades at 2x cash i.e. $40.
GOOG 2x cash is around 150-200.
RIMM is already approaching $30s

2x cash was last low multiple in 2000-2002 bear and that was a baby bear. What we have now is one for the ages which comes every century. SO maybe 1x cash is the way to value them.

In 1929, same period valuations, leaders like X traded at 1x book.