Price/Earning (P/E) Ratio
The current P/E ratio is about double what it should be, which indicates that stock values are currently heavily overvalued.
I explain why I think stocks are overvalued here via a phenomenon—stock buybacks-- that was made illegal in the 1920s, but is now legal again for companies to do.
The Buffett Indicator
We all know Warren Buffett to be one of the greatest investors of all time. This special indicator compares the total market value of stocks to the Gross Domestic Product (GDP).
If the B.I. is greater than 100%, then stocks are currently valued more than the GDP. In cases of a Buffett Indicator (> 100%), stocks are soon set to regress in order to compensate for such an elevated B.I. levels.
Margin Debt
Margin debt is a measure of the amount of money being borrowed to invest. Margin debt has been growing faster than the stock market. When this happened in the past (2000 and 2007) there was an immediate market correction to follow.
Please note: This in only my opinion and nothing more. Please do not take any of the information presented as investment advice.