Dow Value Update 2013: Value is Priced In - 15% Correction Possible

In my 2012 equity outlook this is what I said:

"Fair value is trending up strongly, with the Dow Jones still appearing cheap, and is highly likely to indicate a continued equity market rally from here."   

http://macrovalueinvestment.blogspot.com.au/2012/01/2012-equity-market-outlook-summary.html

This is the first update since early 2012.

All three metrics suggest that the Dow and, by association, the US equity markets are fully priced and have the potential for a correction. Whilst the current circumstances do not yet appear to be any where near 2008 levels, I would suggest that a 15% correction is definitely possible. This would imply a price target of just under 13,000 from the current level of 15,115. 

Timing is uncertain, but a move to between 13,000 [-14%] to 14,000 [-7.3%] is highly possible between now and the next three months.

Caution at this point.

Note that current value metrics are still being updated from 2012 and may be adjusted or improved.