How overvalued is the market

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.