A lot can change in less than two months apparently: it was just on December 31, 2014 when deep in the crude-oil rout the sell-side community was still predicting solid EPS growth of 8.20%. Just 7 weeks later, on February 20, consensus opinion as summarized by Factset, now anticipates EPS to collapse by two-thirds, as S&P 500 earnings (non-GAAP) are now expected to rise by just a fraction, a tiny 2.80%, in all of 2015 (and decline on a non-GAAP basis, but for now nobody cares about actual numbers for the time being).

And while the chart above gets undeserved credit from extensive "one-time" and various other non-GAAP adjustments, not to mention projections for even more margin expansion, i.e., mass layoffs which will continue to be masked by the BLS in seasonal-adjustments until one day the massive retroactive BLS revisions confirm that there was actually no job growth in 2015 and probably in 2014, it is the revenue growth that has finally turned a historic corner, because while on the last day of 2014 there was still some hope that S&P500 sales will still grow even if at a very muted pace, **as of Friday - for the first time since Lehman - full year revenue growth is now projected to turn negative!**

As noted above, **this is the first negative revenue inversion since Lehman:**

It gets worse: while we showed yesterday that the median EV/EBITDA multiple of the S&P500, having just crossed 11.0x is the highest in history, now Factset observes that even on a simple P/E basis, the market is more overbought than during the entire housing bubble period of 2005-2007, and at 17.1x, forward PEs are the highest since 2004.

The forward 12-month P/E ratio for the S&P 500 now stands at 17.1, based on yesterday’s closing price

(2097.45) and forward 12-month EPS estimate ($122.72). Given the high values driving the “P” in the P/E ratio, how does this 17.1 P/E ratio compare to historical averages? What is driving the increase in the P/E ratio?

The current forward 12-month P/E ratio of 17.1 is now well above the three most recent historical averages: 5-year (13.6), 10-year (14.1), and 15-year (16.0).

In fact, this week marked the first time the forward 12-month P/E has been equal to (or above) 17.1 since December 31, 2004. On that date, the closing price of the S&P 500 was 1211.92 and the forward 12-month EPS estimate was $70.79.

Back on December 31, the forward 12-month P/E ratio was 16.2. Since this date, the price of the S&P 500 has increased by 1.9% (to 2097.45 from 2058.90),while the forward 12-month EPS estimate has decreased by 3.3% (to $122.72 from $126.90).Thus, both the increase in the “P” and the drop in the “E” have driven the increase in the P/E ratio to 17.1 today from 16.2 at the start of the first quarter.

It is interesting to note that despite the decline in the forward 12-month EPS estimate for the S&P 500 over the past few weeks, analysts are still projecting record-level EPS for the S&P 500 in the 2nd half of 2015 (please see page 25 for more details on EPS estimates).

If not, the forward 12-month P/E ratio would be even higher than 17.1.

Once we approach the second half of the year, and there is no revenue projection, expect full-year EPS forecasts to crumble, pushing the P/E multiple as high as 20x, both on a GAAP and non-GAAP basis at which point drinks are on David Tepper.

Meanwhile the market... well, just don't show this chart to the stock-trading desk on the 9th floor of Liberty 33.