In data released by Standard & Poor’s on August 4th, the top down operating earnings estimate for the S&P 500 during 2011 was $76.43 per share. Bottom up estimate was $94.64. The S&P closed at 1127 on August 4th.
In a file dated August 17th, 2011 top down, is now $82.12 – 7.4% higher than 13 days prior. While, bottom up, was little changed to $94.40. The S&P closed at 1092.54 on August 17th.
Could it be, the S&P computers, are Keynesian and starting to predict a response to the latest in FED policy? Or, are the numbers as worthless as the paper it’s denominated in?
If the models are accurate, we should bounce here. The fed model, says the same. Technical analysis on the other hand, says the bottom falls out of equities tomorrow, with oil following suit, and the long end of the yield curve prints fresh lows. Who wins?