The market is priced pretty fairly right now, with P/E's in the 16.5 range, which is about the 50 year average.
Of course, interest rates are historically low, which you would expect to push P/E's higher. That 16.5 p/e is pretty much equivalent to a 6% interest rate (so your investment return is 6% plus whatever the value of the growth of the stock is).
In the current low interest climate, a p/e of 20 (5%) is probably not unjustified. Of course, since the market posts a forward looking valuation, expected future interest rate increases are already figured in the price.
With earnings where they are, I don't see the markets go up or down much, unless there's some external shock.
