Welcome back to the trading week, one and all. How was your weekend? For those of you who were waiting on the information, we finally got updated numbers from Standard & Poor's regarding Q4's marketwide earnings results. These still aren't the absolute final numbers for last quarter; only about 95% of the S&P 500's constituents have posted last quarter's numbers. The final 5%, though, could take forever to get their numbers in. We'll just go with what we've got, as we really need to put Q4 in the rear view mirror now that the end of Q1 is in sight. SCN Elite Opportunity Free Alerts Get premium select stock picks via email and mobile text alerts from our SmallCap Network Elite Opportunity Team. It's 100% FREE! No strings attached and no credit card required. Click here to sign-up today! OK, per the latest batch of numbers, the S&P 500 earned $26.66 last quarter, bringing the full-year total to $112.92. That's 5.6% worse than Q4-2013's bottom line of $28.25, and though the implosion of crude oil prices gets the blame for the bulk of the year-over-year weakness, the energy sector isn't the sole culprit. Perhaps more important to me and you at this time is what the trailing full-year income of $112.92 means for valuations. At that mark, the S&P 500 is valued at a trailing P/E of 18.7 and a forward-looking (2015) P/E of 17.7, based on 2015's outlook for earnings of $118.92 for the S&P 500. That's a projection for 5.3% growth this year. Not great. As we mentioned to you guys last week, the 2016 earnings outlook for the S&P 500 are also now out. The pros collectively say the index is going to earn $135.75 in 2016, up 14.1% from 2015's expected bottom line. It looks like nobody learned from the sharply-lowered growth estimates for the current year, which are nowhere near what they were supposed to be just a few months ago. And again, cheap oil can't get all the blame. I honestly have no idea what could possibly/plausibly happen in 2015 to set up double-digit earnings growth in 2016. We'll see. For what it's worth, as of right now, the S&P 500 is valued at a forward-forward-looking (2016) P/E of 15.5... which is above the norm for a one-year outlook, let alone a two-year outlook. As is always the case, a chart of the data tells the story as well as any words could. So, here it is... the historical trend and how the outlook fits into the trend's context. The strong 2016 outlook is a little above the current trajectory, though not leaps and bounds above the trend. Still, the valuation issue isn't going to go away (especially now that we're in the latter half of an economic expansion cycle). I know I often sound like a broken record when it comes to valuations, so let me make something perfectly clear again - though we do feel the market is overvalued and due for a dip, valuation is a long-term construct and may or may not quell the rally in the near-term. Heck, all the indices hit multi-year highs today. The NASDAQ Composite is even within reach of its all-time peak from March of 2000. In fact, today's close of 5008.10 was only the third time its ever closed about 5000. You almost have to wonder if traders want to subconsciously do whatever it takes to get the NASDAQ to a new record and then start taking profits. It wouldn't shock me if that subconscious psychology was in play. One thing is for sure - once valuations do matter, that tide is likely to turn in a hurry. Speaking of the near-term.... Something's Missing Most of you will know by now that even if we don't talk about every aspect of the market every day, we're still watching everything every day, and passing the information along to you if it becomes relevant. Well, one of the ideas we've mentioned in passing a few times of late got to the point where we can't gloss over it any longer. What's that? As well as the market has done over the past three weeks or so, there's no denying it lacks the participation we really need to see to expect it to last for any length of time. Our usual breadth and depth chart below tells the tale. The market's been headed higher for about three weeks, and while the number of advances (ADV) has been average, the amount of bullish volume (UVOL) has not only been sub-par, but it's been falling. Today's was another mediocre-to-weak volume day, considering the market is at record highs. It should have been more exciting, drawing people in. Few took the bait. Just for the record it's not like there's a ton of bearish volume either. It doesn't really resolve the problem though - there just aren't a ton of believers and buyers in this rally. It'll be interesting to see when or if (or where) the majority of traders start to get in on the action again. Anyway, in honor of the NASDAQ's achievement today I thought we'd look at it instead of the S&P 500. As you can see, it's been going strong for the past three weeks, but with the recent strength it's now back at a near-term ceiling. With or without the bump into the ceiling, however, it's not difficult to see the composite is about as extended beyond its mean (moving averages) right now as it's been able to muster for the past several months. If for no other reason than sensing a short-term overbought condition is at hand, I can see some weakness starting to develop here. I think the smart thing for you to do here is, well, nothing for the time being. We're at or near a short-term top for more than one reason. While I don't have any reason to suspect we're looking at a major pullback anytime soon, I can see a small one in the works. We'll have to talk about a landing point once we actually see how the market's behaving when it dips. Let's cross that bridge when we get to it. Good Stuff All of you know by now there's always some great commentary and perspective available at the website. For whatever reason though, there was even more great stuff than usual at the website today. I had to force myself to limit my recommendations to only three. First and foremost, kudos to Bryan Murphy who's pounded the table a couple of times on Aruba Networks (ARUN) in the latter part of last year. Hewlett-Packard (HPQ) confirmed today it was buying the company, at a sweet premium. More important now, Bryan Murphy made a great point about how this acquisition could start an M&A spree in the networking space. This prospect puts Ruckus Wireless (RKUS) in the limelight as the next possible acquisition target. I'm sure you're familiar with wearable camera maker GoPro (GPRO). You may also be aware of its mounting challenges. What you may not be aware of is how to invest in the entire wearable camera industry - which is still heating up - without wading into risky GPRO shares. The company is called Ambarella (AMBA), and Peter Graham has an earnings preview and overview for you right here. Finally, James Brumley has a couple of great graphics and explanations about why the market may be underestimating the true growth potential for Tripadvisor (TRIP). At the core of the opportunity is the fact that the travel-booking industry is one of the few not yet dominated by online presences, and hasn't reconfigured to operate entirely around the web. Of course, if those stock commentaries still aren't specific enough for you and you just want someone to tell you what to buy, there's still time to sign up for the Elite Opportunity's free stock picking alerts. And free really is free. No credit card is needed, and only your e-mail address or your smartphone number ( to receive the more timely text alerts) are necessary to sign up. Act fast, because this offer may not be available forever. Just go here, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEOL/v1/