As we continue through 2015, events continue to pop up that provide investors with anxiety and question the rally’s strength.  Most notably, strong US dollar/weak oil and the effects it is having on US corporate earnings.  Additionally, continued speculation of a Federal Reserve interest rate hike, China bubble worries, Russian aggression, Greek default possibilities, etc continue to put pressure on the bullish thesis of the market.  Now bulls have another issue to worry about: valuation.  First looking at the Shiller PE Ratio, the current value is 27.07, just above levels during the Great Recession and hitting levels not seen since Tech Bubble.  Additionally, the S&P 500 currently has a price to forward earnings ratio of 17.5, the highest value in 40 years, outside the Tech Bubble. Currently, the S&P 500 is up nearly 2% year to date.

S&P 500

Goldman Sachs recommends looking for short opportunities


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