Stock traders need to know when stocks are priced too low, priced normally, or overpriced in order to time their trades. Today the market as a whole has recovered from the Covid-19 crash at the beginning of the year. Some stocks like the tech giants are thriving while others like airlines, tourism, hotels, energy, and others are still hurting. The real question for traders is if the market is priced too high and ready for a big correction. True, the stock market is excessively priced according to normal measures like the P/E ratio but not so bad if you use an output gap adjusted P/E. This implies that the current rally has room to run.

If you enjoy our post, feel free to subscribes to our rss feeds