Average P/E is 27. For basic materials it is almost 15. Outlook growth is weak and even if the market drops by 50% stocks look overvalued. Check out LTD to equity ratio. It shows that almost 80% of the companies have debt way over their equity. It means that if they pay the debt, nothing will be left and still they owe. It is like you have a 500K house and a debt of 1 million and your house is appreciating at maximum 2-5% per year and people are betting on 27%. It is a very simplistic way looking at the market. The only reason that market is hanging at this level is investors are not finding any better thing to invest. Investors are getting into a bubble led by the governments. http://biz.yahoo.com/p/s_conameu.html