The four market valuation indicators that are commonly used are:
- The Crestmont Research P/E Ratio
- The cyclical P/E ratio using the trailing 10-year earnings as the divisor
- The Q Ratio, which is the total price of the market divided by its replacement cost
- The relationship of the S&P Composite price to a regression trendline
The Average of the Four Valuation Indicators plots the average of the four arithmetic sequences, as well as the standard deviations above and below the mean, to provide a condensed description of valuations.
At the end of last month, the average of the four is 199% — up from 185% the previous month.