Why did 4/6 bullishness quickly vanish? I think a valuation issue and Wall St cos must be getting the latest SPX earnings estimates.
SPX forward 12 month p/e from 17.49 (round number-ish 17.5?) down only to 17.41 with earnings lower, that is bad. 17x support 1999 and 18x resistance 2116.
NDX p/e also mild drop to 18.46 with 18x support 4362 and 19x resistance 4604.
INDU p/e 16.70 which is actually a mild increase from last week despite the price drop. So 16x support 16839 and 17x resistance 17891.
RTY p/e 16.89, reached round number 17x last week, current levels 16x 1035 and 17x 1100.
Also I said Citigroup Economic Surprise Index clearing the zero line could be a tell on bullish / bearish scenarios from here. It dropped back mildly last week and just cannot get into positive territory; which continues basic economic conditions from early 2015.
Although the USA especially at times has been in "bad news = good" modes with FOMC rising rates etc, I do think this report is worth keeping an eye on. I have seen other variants like China, Emerging markets, Japan, EU (all not available without Bloomberg as far as I know) do a good job and leading the next larger index move. This year USA markets rallied along with fundamentals improving from a very low level - so that rally was in many respects warranted but not clearing the zero line is also a tell.
Point remains: we have a real valuation concern as I don't believe SPX will trade much above 18x earnings especially before election matters are settled. This currently stands at 2116 but has been moving considerably lower even in the last 6 weeks when I have resumed tracking markets this way. On 3/11 18x forward earnings was 2176! This means earnings are being adjusted lower. And with the Citigroup report, nothing is surprising economists to upside. Together these put a real cap on further USA gains.