"7500 Represents a selloff of pre GFC highs to a P/E of 7.5. This is after the fact we have already had such a selloff in the GFC 9000 Represents a typical P/E ratio of the post 1932 recovery that went thru until wars end "
But P/E merely indicates the market's thoughts about what will happen to a firms earnings so say if their earnings drop the P/E rises and we're sitting at 5000 with a healthy P/E of 14. Can't really use "but the P/E will be too low" to say the market can't drop as there are TWO factors the other being earnings.
