It's easy for any trader keeping up with the daily moves of certain stocks and watching short-term catalysts to lose sight of the big picture. That’s why it’s important to take a step back from time to time and remember exactly what’s going on from a historical perspective. Here are eight charts that tell the story of what’s going on with the S&P 500 right now.
The first chart is the simplest, yet it is very important. While the 3 percent drop the market sustained in January can be fright-inducing, just look at where it stands in the longer term.
The price to earnings ratio of the market (PE) is currently at 18.8, above its historical average. However, it’s actually on the low end of its range since about 1990.
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