Quick market thoughts

At this point, the S&P valuation appears to be more than 60 times trailing earnings and at least 25 times future GAAP earnings (the numbers for this estimate are around $40). While market bottoms usually feature a high P/E this is ridiculous.
Do a few calculations with other currencies and you will see that many foreign investors playing US stocks are unlikely to have a positive performance in 2009 so far, due to the big headwinds from the dollar selloffs. Will they continue to chase at these levels?
I think we’ll need significant earnings surprises, a fantastic holiday season for retailers, and no financial / economic shocks of any kind to stay up at these levels… but hopefully I have missed something.

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