The risks of the current US stock market must be taken into consideration

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From a long-term perspective

The price-to-earnings ratio of the S&P 500 has gradually escaped the range of 5-20 since 1990, trending upwards.

This can be described as a process of bubble formation. Although this bubble stems from global confidence in the US market, Nvidia's price-to-earnings ratio (PE-TTM, trailing price-to-earnings ratio, calculated using the same method as shown above) is 56.97, which means Nvidia's stock value needs to earn nearly 57 years at the current level to realize... this bubble indeed must be taken seriously.

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From a short-term perspective

The current price-to-earnings ratio of the S&P 500 (30.37) is close to the peak of 1999 (34) and has already surpassed the level during the bankruptcy of Lehman Brothers in September 2008 (26.48).

It is important to note that the price-to-earnings ratios of the S&P 500 were higher in 2000 and 2009 because during the bursting of the internet bubble and the spread of the subprime mortgage crisis, the US stock market fell, but profits fell even more, resulting in a sharp increase in the price-to-earnings ratio as the stock market declined.

Therefore, even without a financial crisis, the S&P 500's price-to-earnings ratios of 1999 and 2008 suggest that the US stock market may still have some room for correction compared to the current levels.

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In conclusion

I am preparing to try shorting the US stock market. I am still researching and have not opened a position yet. On one hand, the US stock market may continue to rise for a while, so I need to observe for another day. On the other hand, I am also researching individual stocks to find a suitable shorting target.

As for altcoins, the data from the market leader shows that the US stock market has risen by 30% over 14 weeks. Brother Bee calculated that from April 24 to July 31, during these 14 weeks, the total market capitalization of altcoins, excluding BTC, ETH, and stablecoins, only increased by 26.85%.

The rise of altcoins has not even matched that of the US stock market, and there are signs of correction in the past two days, indicating that altcoins might be ahead of the sentiment and expectations. It seems that shorting the US stock market may have a better cost-performance ratio?

For those who want to short the US stock market or leverage long on it, you can apply to the Mystonks contract test whitelist.