Wednesday, 18 January 2017
DOW and American Indexes to plunge
The chart shows the Dow Industrial Index to be at a peak.
Wall Street Journal gives the P/E of Dow Industrials (Current price over earnings for 2016) at 21.44. Nasdaq and S&P are even more extended, at 25, and Dow Utility at 28.
Meanwhile DAX (German Index) is around 18.
Pressure will now be on the American indexes to plunge towards a P/E of 18 (but based on estimated earnings for 2017). Expectations of a sudden massive surge in American GDP/ return on shares, as a result of Trump economics, are fantasy. There will be a plunge towards $13,000 for Dow Industrial Index.