Friday, June 1, 2007

Fun Friday

There was a great piece out yesterday in the New York Times highlighting general market sentiment and comparing current P/E market valuations to their historical averages.

Many people want to target this market as top heavy and in dire need of a correction, but the uptrend is intact and thus should be followed. Listed below is a quote I found most interesting.

Still, many market specialists note that even with the recent run-up in the stock market, American companies are cheap compared with the past and with other world markets. The price-to-earnings ratio for companies in the S.& P. is about 18 today, compared with 32.8 in 2000 and a 21-year average of 22.5.

As for my recently purchased put options, ADM continues to under perform while the market chugs higher. Most importantly, ADM was unable to surmount the pivotal 200 DMA yesterday. Due to this development I am all the more confident with my options. It should be noted that possible support exist at $34.00.

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