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1/ Over the long-term, market fluctuations can be partitioned into durable and transitory components. Market advances above reliable valuation norms (blue>green) tend to be transient. Assuming no break below historical valuation norms, 1100 on SPX is a plausibly "durable" target. 
2/ I'm also asked why I imagine that a retreat in valuations would stop at historical norms, given that nearly every bear in history aside from 2000-02 violated those norms. The answer is that a 60-65% loss is a base expectation. A further loss is a risk. hussmanfunds.com/comment/mc1905…
3/ Here's a nascent idea I've been looking at. We know that *regardless* of monetary policy, every economic recovery, including the recent one, has followed a trajectory that amounts to simple geometric decay of the output gap that existed at the economic trough...
4/ … and a longer term chart, which further reinforces the view that economic recoveries are largely mean-reverting events rather than policy-driven ones - again because the trajectory is virtually independent of whether policy interventions are conventional or extraordinary...
5/ .. the nascent idea examines output gaps vs mkt plunges. While a few collapses like '87 occurred with real GDP < potential GDP, the big ones emerged after GDP closed the gap and moved > potential. It may be that this bull was so extended partly b/c the 2009 gap was so large.
6/ Put another way, as long as GDP is growing faster than potential, there may be additional speculative support (though still best inferred from market internals) despite obscene valuations. But we're now at a point where GDP would grow only ~1.6% unless unemp falls persistently
7/ All of which is to suggest that with the GDP output gap finally eliminated, we shouldn't be particularly surprised if valuations that exceed 1929 and 2000 begin to bite much harder. While my immediate view is still neutral here, I prefer hard and automatic safety nets nearby.
8/ Quick update. My best measures of market internals are now precisely at the classification threshold (the signal-extraction equivalent of sitting literally on the fence). May rebound, but keep automatic safety nets nearby (not ones that rely on execution). Expect whipsaws.
9/ … & quick economic update. Recall that employment is among the most lagging indicators. Sharp drops in regional Fed and ISM components typically lead slower job growth. Over past 10 mos, NFP avg 216k. Next 2 mos likely to see nearly -200k shortfall, bringing jobs closer to 0.
