Still, 1966 was a long time ago, some may chime. Don't think the Dow can move sideways for seven years? Well, take a look at what the Dow has done since January 2001, or since the start of the Bush Administration. On January 30, 2001 the Dow closed at 10,881. It's trading around 9,000 now. Eight years. A roughly two thousand point decline. (Now, in fairness one has to add that the Dow at 10,800 in 2001 was overvalued, and today's Dow is undervalued, unless earnings estimates are revised downward for 2009, so the Dow has been more-or-less flat during the past eight years, on a value-adjusted basis.)

Low S&P 500 P/E a buy signal? Not quite

And about those price per earnings ratios, or P/E, don't look for much market support from that indicator. At the height of the just-concluded bull market, the P/E of the S&P 500 was 26. Today, it is about 11, which is actually below the post World War II P/E average of about 17.

However, the problem is, during bear markets (which usually accompany recessions), the P/E can dip much lower, to even 10 or 8. You don't want to know what the P/E fell to during the Great Depression.

And, as noted, earnings estimates can be revised lower, as they frequently are during recessions / period of sluggish GDP growth, quickly increasing the P/E. Hence, a low P/E for the market, in and of itself, is not a sure-fire buy support level for the stock market.

Market / Economic Analysis: The above suggests one key to an enduring rise in the Dow is that decision makers -- private and public -- should work to achieve, moving forward is the sustainable economic growth with an increasing productive capacity economic fundamentals.