Another ugly day at the equities purchasing parlor, so it's appropriate to display this:
The chart comes from Bronson Capital Market Research (via Barry Ritholtz's "The Big Picture"). BCMR explains:
"The stock market Price/Earnings ratio (the solide blue line) is the S and P 500 Index ... divided by earnings ..."
Bronson graphs the ups and downs of the ratio, and predicts that the bottom of the market will come somewhere around October 2014.
It's as good a forecast as other predictions out there. Maybe better. We'll know how it holds up when the autumn leaves fall in 2014. (Click on the chart for readable text and more detail.)