SP500 price to trailing twelve month earnings

Trailing twelve months is too short time frame to measure long term earnings potential. Nevertheless, past twelve months earnings (Ettm) is often used as a short hand for real fundamental analysis. Figure below shows the SP500 vs Ettm. Currently, the P/E=27 which is high by historical standards but not a record. Again, just one year P/E is not very predictive of the near future but it shows that stock market is not cheap.

Figure: SP500 vs. trailing twelve month earnings.