https://www.tandfonline.com/doi/pdf/10.1...15.1165917
Zweig suggests three crucial conditions for a bear market: 1. Extreme deflation. This is not present in 2016. 2. PE ratios of 18 or above. The current PE of the S&P is around 22, which Zweig says is bearish. However, he says the exception is when profits are low (causing high PEs) because of a business downturn. This is the case in 2016 with poor earnings. 3. Inverted yield curve. An inverted yield curve last occurred in early August of 2008.
Zweig suggests three crucial conditions for a bear market: 1. Extreme deflation. This is not present in 2016. 2. PE ratios of 18 or above. The current PE of the S&P is around 22, which Zweig says is bearish. However, he says the exception is when profits are low (causing high PEs) because of a business downturn. This is the case in 2016 with poor earnings. 3. Inverted yield curve. An inverted yield curve last occurred in early August of 2008.
