The first chart below is a bit complex but worth the effort to understand. It overlays three market valuation indicators that I track at dshort.com:

• The relationship of the S&P Composite to a regression trendline (more)
• The cyclical P/E ratio using the trailing 10-year earnings as the divisor (more)
• The Q Ratio — the total price of the market divided by its replacement cost (more)

Click for a larger image

At current earnings and replacement costs, what price in the S&P 500 would recreate the levels of previous historic lows?

Historic lows in this S&P Composite have occurred when all three of these indicators are below 0.50 — the lows in 1921, 1932, and 1982. The low in 1949 saw two of the three below 0.50.

The next chart is identical to the one above with one number changed. I replaced the latest index price with a round number that would put us in the range of those historic lows. The title of this post was a spoiler. The S&P 500 at 400 would do the trick.

Click for a larger image

I'm not offering this chart as a forecast. Perhaps the secular bull market since 1982 has forever changed market history and the lows of the past are a thing of the past. Or perhaps the decades since 1982 have been a succession of bubbles — in equities, real estate, commodities, and perhaps even gold. Time will tell.

In a future post I'll look at some of the arguments why this time is different — or not.