Valuation and fundamentals

Because I have lost faith in WSJ data as explained in the last column, I am just going to post a link to Yardeni's chart of Citigroup Economic Surprise Index and his SPX P/E graph  that seems to be from Thomson Reuters data, and comment on those. 

But I just found a source for the actual Thomson Reuters number, so I will watch it for a few weeks and if it looks good then will shift over to that. 

For now there has been a huge development in the Citigroup Economic Surprise Index that is quite bullish for markets. I've been watching for months for a move above the zero line and suddenly the Index is higher than it has been since the start of 2015 - 18 months - with a very sharp slope up. This is very bullish and according to this the market should soon blast through the highs.

Valuation remains on the higher end and appears to be about 16.50. This is a bit lower than the end of 2014 but asset managers probably pay up to be long stocks into the seasonally strong Q4 and a bit less in seasonally weak Q3. Regardless this gives room for stocks to move up to 2180-85.