The following is an excerpt from a recent chart book from The Felder Report Premium.
In a recent interview for RealVision, Stan Druckenmiller spoke about how he realized late in 2000 that rising interest rates (second pane in the chart below), oil prices (third pane) and the dollar (bottom pane) were almost always a recipe for lower corporate earnings (top pane). This gave him the confidence to put on a very large short position, backed by the idea that analysts were far too optimistic about future earnings. Looking at what interest rates, oil and the dollar have done recently, it appears there's a distinct possibility of a very similar disappointment playing out over the next few quarters.
Certainly, as noted by Top Down Charts recently, expectations of forward earnings growth have not been as optimistic as they are today since that inauspicious time.
Finally, the similarity between the price pattern of the S&P 500 today and the pattern it put in at the 2000 top may also be worth taking note of (chart via Nautilus Research).
All in all, investors may want to consider the possibility of another earnings disappointment that leads to a reevaluation of the merits of paying some of the most ridiculous prices in history, especially at a time when liquidity is being withdrawn at an unprecedented rate.