The cyclically adjusted price-to-earnings ratio, Shiller P/E, is a valuation measure applied to the US S&P 500 equity market. It is defined as price divided by the average of ten years of earnings (moving average), adjusted for inflation.

The Shiller PE Ratio mean is 16%.

It is now at 28.1%. 

Note that the only time it was higher was during the high productivity 1990s. That's when the combination of low cost computing met the powers of the internet in one of the greatest leap forward in productivity since the transcontinental railroad was linked to the telegraph.

2017? I don't see anything like that happening today or tomorrow. The Trump affect - lower corporate taxes and regulations - do make a difference, but only relative to the actual gains in GDP and corporate profits during 2016.

It's not a matter of whether a correction will happen, it's just a matter of time. When? No one can say for sure. But it will be around the time when bonds start to look attractive from the US and cash-rich corporations.

All bonds are determined by US Treasury rates. The Fed has already announced three more interest rate hikes in 2017. If Congress and Trump's tax cut plans involve more deficit spending, that could push bond interest rates high enough to have investors move cash from stocks to bonds.

And that could be enough for the Shiller index to correct itself closer to its historical mean.