From this view, it is clear that SPX reached 18x forward earnings and took a breather. This is a bit less strong than last week since the slope just evened out, with the 10 week moving average dropping slightly.

Meanwhile Economic Surprise ticks up from extreme low levels. Still pretty bad though.

Rough estimate of scoring = 2 for earnings and -4 for valuation. This is a drop in earnings (due to slope of P/E leveling off) and slight increase for fundamentals (due to uptick). Earnings get double weighted so:

2x2 = 4
-4
Combined score = 0 on scale of -15 to +15.

This model has pointed to sideways market for several weeks now, and this is how it has played out. Before double weighting the earnings, fundamentals led to more bearish conclusions in May which did not work as well.