Rising S&P earnings revisions and a Nasdaq valuation far below the 2000 bubble level argue against a bull trap in US large caps. Nasdaq trades at 18x forward earnings versus over 80x in 2000. Positive breadth divergences, record short ETF exposure and put volume, and semiconductors waking up add to the case. In all 19 post-midterm instances cited, markets were very green over the following 12 months. x.com  x.com 

Broader participation, earnings growth and lower multiples support US equities into year-end, with seasonality also favorable. The equal-weight S&P rose 1.95% this week while the cap-weighted index slipped 0.05%; EPS is up 38% so far and multiples are down 17% year to date. The 10-year yield fell 41 basis points. x.com 

US large-cap stocks are frothy and now need years of earnings to validate today's prices, even though the rally is not irrational. Per FactSet, S&P 500 earnings are up about 28% versus 13% expected, but the Shiller P/E is near 42, close to 1999-2001 extremes. Per @KobeissiLetter, leveraged ETF assets hit a record $177B and the leading-to-coincident indicator ratio of 0.84 matches the 2008 low; per @charliebilello, 90+ day delinquencies hit 13.1% for credit cards and 5.6% for auto loans. x.com  … Show more

Strong corporate profit margins may make the S&P 500 better value than traditional P/E ratios suggest, despite elevated stock prices. Per Bloomberg, its P/E-to-profitability ratio is at its lowest in nearly 14 years, last seen around 2012. Wall Street might be overlooking something important. x.com 

The S&P 500 is not in a bubble. At a forward P/E of 19, it sits just above its long-term average even as it presses new highs. x.com 

US large-cap equities are vulnerable because earnings have not caught up with total market capitalization. The market is farther from its 200-week moving average than at any point in 18 years, and cracks are starting to show; staying bullish ignores these risks. Rate hikes remain possible, oil is still high, and yields may climb again, so now is the time for caution. x.com  x.com 

US large-cap earnings are in a historic boom that undercuts the doomers: S&P 500 companies are beating EPS estimates by an aggregate 29.2%, the biggest beat ever, against a 7.0% five-year average. 86% of companies beat, and the blended net margin reached an all-time high of 16.9%. This is the largest investment boom in history. x.com 

Improving breadth and GPUs massively outrunning depreciation costs put US-equity risk/reward heavily in bulls' favour. Some 59% of S&P 500 stocks are above their 50-day average; the Nasdaq 100 is positive over five trading days, and small caps bounced off their 200-day average. Buy gradually, as the selloff may not be completely over. x.com 

US stocks need not rise just because profits are strong: that is first-level thinking, and everyone already knows earnings are growing. P/E multiples fell over the past six months despite upward EPS revisions, and years like 2018, 2006, 2005 and 2004 saw EPS growth near 17-20% with weak or negative index returns. Valuations sit in the 98th percentile, inflation, rates and deficits are rising, policy may turn anti-corporate after November, and AI capex has inflated profits. x.com 

S&P 500 earnings are keeping pace with prices, so this does not look like a bubble. Quarterly earnings are on track to grow 29.5%, more than twice the 10-year average of 12.6%, while the 18.7 forward P/E is just below its 19.1 decade average. x.com