Models updated quarterly. Become a member for weekly model updates, aggregate valuation model access, and more.

Current Market Valuation

We provide long-term stock market valuation models for institutions, financial advisors, and retail investors.

Explore our tools to evaluate whether the market is historically overvalued or undervalued, and become a member (7-day free trial) for access to premium models, more data and analysis, and weekly data updates.

This data is an educational resource to better understand market and business cycles. While these cycles often correlate well with long term stock market performance, the analysis should not be used as a short term trading strategy. Market valuation is not a get-rich-quick hack. CMV models are not trading advice. The best investment strategies are long term diversified holdings, not frequent trading or market timing. Please see the About page for additional information and disclosures.

Year-to-Date S&P500 Returns

A quick visual look at how this year's S&P500 performance compares to prior periods, since 1950.

Updated May 31, 2025

Posts

The Data on Day Trading

An overview of studies evaluating actual day trading results. Spoiler: Almost everyone loses big.

Picking Stocks Doesn't Work

The data shows that active management (picking stocks) just doesn't work on a reliable basis - and it's not even close.

Stock Market Performance During Recessions

On average, a recession drops the S&P500 by 20% in under 6 months.

Aggregate Market Valuation Model

Available only to members and updated weekly, this is our aggregate score of the current valuation of the US stock market, presented as a combined score showing approximately how many standard deviations the market is from historic norm.

In the past, this model has correlated well with future market returns.See how the index correlates against future stock market returns.

The aggregate model is available to all members. Membership also includes weekly data updates and interactive graphs across the entire site, model correlation data, and more.

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Market Valuation Models

Buffett Indicator Model:
Overvalued

The Buffett Indicator is the ratio of the total value of the US stock market versus the most current measure of total GDP. When this value is very high it suggests the stock market is overpriced relative to actual economic productivity.

Updated March 31, 2025

Price/Earnings Model:
Overvalued

The PE Ratio Model tracks the ratio of the total price of the US stock market versus the total average earnings of the market over the prior 10 years (aka the Cyclicly Adjusted PE or "CAPE").

Updated March 31, 2025

Price/Sales Model:
Overvalued

The PS Ratio Model tracks the ratio of the total price of the US stock market versus the total prior-year sales of all firms in the market.

Updated March 31, 2025

Interest Rate Model:
Overvalued

Low interest rates should generally drive higher stock prices. This model examines the relative S&P500 position given the relative level of interest rates.

Updated March 31, 2025

Mean Reversion Model:
Overvalued

The S&P500 tends to be mean-reverting over very long time periods. Below shows the real (inflation adjusted) S&P500 price, along with an exponential trend line, and standard deviation bands.

Updated March 31, 2025

Earnings Yield Gap Model:
Fairly Valued

A model comparing the earnings yield of the S&P500 against the earnings yield of US Treasury bonds, illustrating the relative value of one against the other.

Updated March 31, 2025

Recession Indicator Models

Yield Curve Model:
Very High Recession Risk

When short term (3-month) Treasury yields are higher than long term (10-year) yields, it is a bearish signal that is almost always followed by economic recession. Chart shows this spread, with standard deviation bands for context.

Updated March 31, 2025

The Sahm Rule:
Normal Recession Risk

The Sahm rule is a recession indicator that triggers when the three‐month moving average of the national unemployment rate rises by at least 0.50 percentage points from its lowest level in the previous 12 months. It measures how quickly unemployment is rising/falling, and is an accurate and timely indicator of when the US economy is in a recession.

Updated March 31, 2025

State Coincidence Indicator:
Normal Recession Risk

A State Coincidence Index (SCI) is an aggregate measure of individual state economic health. This model charts the number of states with month-over-month declines in their SCI. On average, if more than 25 states are in decline, the US overall is entering a recession.

Updated January 31, 2025

Market Sentiment Models

These models are contrarian indicators. When market sentiment is bearish/panicked we display them in green. When sentiment is bullish/euphoric, we show them as red. These classifications very bluntly reflect Buffett's timeless maxim "be fearful when others are greedy ... and greedy only when others are fearful".

Margin Debt:
Neutral Sentiment

Margin debt is money investors borrow to invest in stocks. High margin debt indicates bullish investors, and tends to lead stock market corrections, particularly after margin rates begin falling from their peak. This model tracks year-over-year changes in margin as a percent of total stock market value.

Updated February 28, 2025

Junk Bond Spreads:
Neutral Sentiment

High junk bond spreads indicate bearish sentiment as investors require very high compensation for taking on additional credit risk. Low junk bond spreads indicate bullish investors are eager to take on risk for relatively low incremental return. Note the inverted y-axis.

Updated March 31, 2025

The VIX Fear Index:
Neutral Sentiment

The VIX Index is derived from SPX options prices and represents the amount of volatility investors expect over the coming 30 days. The index has no valence and does not formally predict bear or bull markets. In practice however, high VIX values represent market fear of upcoming volatility, which tends to correlate with market crashes. Alternately, low VIX values indicate market stability and bullish sentiments.

Updated March 31, 2025

Economic Policy Uncertainty:
Very Pessimistic Sentiment

The Economic Policy Uncertainty index is a time-series measure of uncertainty in future US economic policy; i.e., uncertainty over future interest rates, taxes, tariffs, and other government-controlled fiscal and monetary policy.

Updated March 31, 2025