Place Your Hedged S&P Bet, $1,440 or $400 Target ($SPY, $SPX, All or Nothing)

Vinny Catalano, president of Blue Marble Research, was on Tech Ticker today and gave two potential outcomes for the S&P which I found interesting. He said the S&P will either trade at $1,440 on $80 earnings per share (EPS) x 18 price/earnings multiple (P/E) -or- hit $400 on $50 EPS x 8 multiple. Place your hedged bets folks, all or nothing. Below I embedded the Tech Ticker video along with an S&P 500 chart going back to 1990, the last time the S&P traded at $400. The S&P closed at 1,078 today so in percentage terms it's either 33% upside or 62% downside from here. Will it be higher EPS with multiple expansion or lower EPS and compression.

I also threw up the 200 and 50 Month moving averages. If the 50 crosses the 200 month moving average to the downside I don't think that's bullish. SPX recently broke above the 200 Month though so there's a chance for a 50 month MA test. The downtrend from 2007 is still in tact and beware of the potential head and shoulders pattern.

Vinny is cautiously bullish but ready to jump ship. He said if earnings and macroeconomic numbers come in below consensus estimates and if the market fails technically (which would confirm fundamental downside), he said it's time to "get out". Will this be the biggest straddle in history?

SP-500 (Standard & Poors 500) Since 1992 -

Courtesy of Tech Ticker

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