Crash Value lines up with the H&S target of 3800 on the Dow. It is a bit more optimistic on the SPX, having around 490
Come on calling DOW 7000 seemed like a stretch but MA's of charts starting from late 1980's did allow one to opine that call.
My only complaint is that todays S&P composition is not comparable to composition of S&P in 1982. Why don't you go back and chart a basket of stocks like IBM GE XRX et al or Wilshire 5000 or some measure that hasn't radically changed as much. Better yet chart G DD PG CL Goodyear or some companies that do the same thing as they did 20 years ago but much more profitably as I imagine that they do.
"Crash Value is calculated from the 1982 base lows with a 7.5% annual rate of return, which is fair considering the dividend cuts we've seen in the past decade."
Why use a starting point of 1982 which is the end of a long flattish market? What number do you get if you use 1968 as the starting point? For the S&P was about the same in 68 as in 82.
A more interesting calculation would be inflation adjusted returns, let's say 2% over inflation rate each year instead of a simple 7.5%.
Taking your S&P 490 number and compounding it for another 13 years @ 7.5% (to make the starting point 1968 vs 1982) I get 1254...could be S&P is undervalued here.
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