Is the market too high?

The above chart shows the graph of the S&P 500 (blue line) and earnings per share (red line). (Click on the chart to enlarge it).
Earnings per share are the lifeblood of the stock market. Stocks rise when earnings per share rise. The market gets into trouble when earnings per share start declining.
Barron's reported earnings per share declined in the past two weeks. Also, profits declined in Q4 according to the Bureau of Economic Analysis.
The point? These are important headwinds for stocks. If they do not change direction, the market may be in real trouble.
Stay tuned.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets
No. 1 bond timer in the past 12 months.

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