We’ve never had a bull market last this long, but longtime StockMarket Cycles Editor Peter Eliades isn’t so convinced that it will last much longer.
“I continue to have the same worries that I had before,” Eliades told FOX Business’ Neil Cavuto on Wednesday.
Bear market indicators are evident in the New York Stock Exchange and the Dow Jones Industrial Average, he said, which are both still 3 percent away from all-time highs. All three major stock indexes reached bear market lows in 2009.
But Cavuto pointed out that the bulls would argue that if you average it all up over the years, the multiples still look good. However, Eliades wasn’t so sure.
“The earnings estimates are for six months or a year out or for this calendar year and that’s where they take their price to earnings ratio from—those estimates are never correct,” he said. “They are probably the worst numbers you can get from Wall Street is the estimates of earnings.”
Eliades also said that looking price earnings ratio from the prior 12-months of earnings isn’t exactly the ideal indicator either.
“One of my favorite indicators is to look at the yield on the market averages,” he added. “And when you see that the yield on the S&P has been below two percent on S&P stocks you know that you are very, very overvalued,” he explained.
Because of this, Eliades would be “amazed” if the market moves above its current position ten years from now.
He also added that he wouldn’t be surprised to see another monster decline within the interim of the next ten years.