“A funny thing happened on the way to the next Bull market: the price-earnings (P/E) ratio has entered bubble territory–again. Note the P/E soared to bubble heights in the early 2000s, which set up the epic collapse of stock valuations in 2008-09. Thanks to Federal Reserve manipulation/goosing/QE, the SPX P/E has once again reached bubble levels. It’s clear the SPX is extended far above what can be considered historical fair valuations. What’s more profitable, a slow melt-up or a panic sell-off and sharp rebound? Definitely the latter, if you’re heavily short, the market is teetering on record margin debt and you can kick out the critical 2X4.”
http://charleshughsmith.blogspot.com/2013/05/a-funny-thing-happened-on-way-to-next.html
