The market was up 0.41% today after a fall of 1% yesterday. The decline yesterday was the largest in a while and might be a signal of more to come. Since the March 14 high, the market has traded in a tight range and the close has been lower than the open 6 out of the last 14 days, which is a change in behavior from the period between January 1 and March 14. No idea which will the market will break, but it is worth paying attention to.

ValueWalk has run an article on a John Hussman chart that uses the Shiller PE to calculate 10 year returns and compares the projected returns against the actual. The correlation is 0.80. The formula Hussman uses to predict the 10-year return is:

Shorthand 10-year total return estimate = 1.06 * (15/ShillerPE)^(1/10) – 1 + dividend yield(decimal)

The math currently works out to 3.9% projected annual return.

On the other hand, Lee Cooperman spoke today at Portfolios with a Purpose and said that he doesn’t see a better alternative to stocks at the current time.

GOLD AND SILVER

You can see how out of favor gold and silver are by looking at the premium (or lack of premium) in the Sprott Physical Gold and Silver trusts (PSLV and PHYS). Both are trading at close to NAV, something that does not happen often.