...where it stops, nobody knows.
Based upon revised earnings estimates, I think fair value for the DJIA is 6,882 (drop of 19.1% from today's close). I backed into this number by taking my estimate for the S&P 500 and multiplying that by the the 200 day moving average of their ratio: 723.63 * 9.51
At this point, neither equity index is screaming over bought nor over sold. This will be a tricky couple of trading sessions until the FOMC meeting on the 24th (2 day meeting).
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