Got Bearishness? Fundamentals data for technical traders

Now that you're all fired up from two days up in the Nasdaq and, let's see, is it 3 days up in the broader indices? In case you might like a refresher, here's some data on the fundamentals that can sober you up. Or you can trot it out at parties to be the life of the crowd! LOL While I'm the last person to counsel trading on fundamentals, it's good to know information like this:

Graham Shows S&P 500 Still Too High as Buffett Loses
Bloomberg - Benjamin Graham, the father of value investing and mentor of Warren Buffett, would find most U.S. stocks expensive even after the Standard & Poor’s 500 Index dropped 56 percent in 17 months.

Graham measured equities against a decade of profits to smooth out distortions, a method that shows the S&P 500 trading at 13.2 times earnings, according to data compiled by Yale University Professor Robert Shiller. At the bottom of the three worst recessions since 1929, the average ratio fell below 10. To reach that level, the S&P 500 would sink another 27 percent.

The rout set off by the subprime-mortgage collapse in August 2007 has fooled investors from Legg Mason Inc. money manager Bill Miller to Traxis Partners LP’s Barton Biggs, who said shares were cheap as they continued to fall. ...

“We are in a depression, therefore I would expect Graham’s and Shiller’s earnings ratios to get down to a single figure,” said Robin Griffiths, who first studied Graham in 1966 and helps oversee $15.5 billion at Cazenove Capital Management in London. “If it is a bad depression, it could take the S&P 500 to 400 or 500. It is clearly becoming better value as the market comes down, but it is nowhere as cheap as it can get.”
....
During the worst bear markets, stocks don’t reach “bargain basement prices” until they fall to 10 times profit or less using Graham’s method, according to James Montier, Societe Generale SA’s London-based global equity strategist. That translates to a price of about 500 for the S&P 500, based on combined per-share earnings of at least $50.

And here, even I had thought when I first set up this chart a few months ago, that it looked too darn bearish (that's why I used a light blue color for the fork trendlines!). Hmmm, these fundamental analyst types make a technical analyst blush to seem like wearing rose-colored glasses, by comparison! Here my monthly chart again, of the S&P 500. If you click on it so you can see it larger, you can see that there are some trendlines pointing down to such lower levels:

Looking at this chart, not only do you see the bearish technical indicators at the bottom as I've referenced previously. You can see just the raw volumes being large as the index dropped persistently over these many months. This in and of itself is a sobering sign - it doesn't have to mean capitulation. It can also mean serious distribution at what looks more and more, in the rear-view mirror, like a real market peak.

Well, this is a post that's supposed to focus more on the fundamentals, so I won't go on yet more. Just a note that, even while people are starting to think that the banks might be turning a corner, with supposedly positive news from Citigroup and JP Morgan, and even if something strange happens like a rally in the banks, it doesn't mean the rest of the companies in the equities markets are in bullish shape.