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Brett Arends’s ROI: The stock market’s oldest indicator just flashed red

I hate to rain on this parade. But the latest lurch upwards in stock prices has just taken market valuations up into the skybox levels, according to the market timing measure with the longest pedigree on Wall Street. It’s just gone from flashing amber to flashing red — meaning, if it’s right, that there is now a significant and rising risk of a crash, and a bigger risk of simply very poor returns.

This has little to do with President-elect Donald Trump, by the way — and much more to do with President Ulysses S. Grant and all his successors.

Wall Street’s jump this week has taken the S&P 500 SPX, +1.32% to an eye-watering 27.9 times the corporate earnings of the past 10 years.

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