Thomson Reuters SPX 12 month forward P/E ratio dropped significantly to 16.16 last week, while the SPX price jumped. To do the earnings math, as of 11/4 the implied estimate was 125.69 per share of SPX index, and after 1 week it is 133.94.

I don't know the inner workings of what is producing the numbers, but this is very bullish. If the market can rally to 17x forward SPX again (as it was as recently as early October 2016) then that currently implies a price of 2275.

These estimates change from week to week, and I'd like to know more about how they are calculated, but I am trying to spot a general trend rather than specific price point.

Citigroup Economic Surprise Index is still below the zero line, which is not positive for the market.

For the last several weeks, especially since the fundamentals were coming in below expectations, I have been saying both valuation and fundamentals have been headwinds for the market. But given the P/E drop I am saying these are mixed. If SPX maintains $130 share earnings (if) then there is plenty of room for the price to move up. But I think rallies will be met with selling if fundamentals are disappointing with rate hike looming. If fundamentals go back positive per the zero line of the Surprise Index, then both will be tailwinds for higher prices.