History says we are still far away from having seen the low

Left hand the DOW chart ( click on it to enlarge and it shows where we are compared which is scaring) from 1900-1935 in that time frame we had 5 crashes in the magnitude of 50% and the final one was almost 90%. The crash of 1907 was used to reintroduce the 3rd central bank for the USA The FED has never been able to prevent crashes but rather helped to produce them as they always were influenced by Rothschild's or nowadays Goldman's .

History (common sense) suggests that a real trough is done around a 8 times trailing earnings hence if the 50$ earning for the SPX estimation becomes true the low this year should have been around 400 SPX. Another fact is that in big recessions or rather depressions the low is rather seen sometime after it starts in 29 in took 3 years and in Japan 19 years and we did not make a big advance since ( from the high perspective).
The other problem is that the recent slightly better earnings comes from an accounting change for banks which were the biggest upside suprise providers. They are not really comparable as the rules have changed in their favor ( marking to their wishful thinking prices now).
Another fact is that what I told earlier as well that 10-15% of all SPX earrings are hypothetical and by evidence completely overstated as the theoretical profits of pension funds within the companies can be assumed and booked with hypothetical growth rates of 9-10%. We know that the stock part did not make any money the last 10 years and interest rates at 0. Many companies have deeply underfunded pension funds which is also a big problem with the car makers financial troubles.

This ongoing rally which I saw coming for now is just a temporary sucker rally of a bigger magnitude it just went higher in wave A than I had thought but my overall estimation was 950-1000 SPX before we drop to 400 starting end of Q3.

Excerpts

As of Friday, May 8th:

The blended earnings growth rate for the S&P 500 for Q1 2009, combining actual numbers for companies that have reported, and estimates for companies yet to report, fell to -36.3% from -35.1%.
If the final growth rate for Q1 '09 remains negative, it will be the first time the S&P 500 recorded 7 straight quarters of negative growth since Thomson Reuters began tracking the data in 1998.At the start of the quarter, the estimated growth rate for Q1 was -12.5%. (Data provided by Thomson Reuters)

Analysts overestimated earnings by an average 13 percentage points in each period between the third quarter of 2007 and the end of 2008. Better-than-expected first-quarter results haven’t prompted them to boost forecasts for the rest of 2009. Instead, they’ve ratcheted down predictions as the first global recession since World War II weakened demand.

Analysts said in March that profit among S&P 500 companies may drop 29 percent in the second quarter and 15 percent in the third before jumping 95 percent in the final three months of the year, according to data compiled by Bloomberg.

Steeper Drops

Now, they expect a 35 percent slide in second-quarter income and a 23 percent decrease in the third. The consensus is for profits to rebound 69 percent in the last quarter, with financial companies accounting for all of the gain.

Analysts project that companies in the benchmark stock index will earn $57.17 on a share-weighted basis this year, data compiled by Bloomberg show. Based on the measure’s closing price last week, investors are paying $16.25 for each dollar of forecasted profit.

That’s in line with the historic average of 16.3 times earnings over the past 128 years, data compiled by Yale University Professor Robert Shiller show. Strategists say stocks are fairly valued, predicting the S&P 500 will end the year at 949, with its companies producing per-share earnings of $47.06.

The estimate represents a gain of 2.1 percent in the next seven months as declining profits push the index’s price- earnings ratio to 20.2. That’s more expensive than any time in the past five years.