If you opened this article, you probably already know what this is about. Here's the latest Price to Earnings (P/E) data from last Friday, December 2nd, 2016.  Stocks are sitting on a mountain of capital, stretched in valuation by low interest rates.

What's missing?

Inflation. Specifically, earnings inflation. Without strong growth in earnings, this rally is doomed to fail.  Markets move in cycles. The current cycle could hit a wall very soon.

Fair targets for the S&P 500 (SPY), Dow (DIA), and Nasdaq (QQQ) could be about 35% lower than the current level.  That's assuming a more normal 12 times P/E multiple, looking forward.