Philosophical Economics

If you want a little more reading on the subject, there's a neat writeup here:

https://www.philosophicaleconomics.com/2013/08/the-great-rotation-asset-shortages-and-the-aggregate-u-s-investment-portfolio/

"(1) For every share of every asset in existence, someone must willingly hold that share at all times. If no one can be found who wants to hold a share, its market price will fall until someone is found.

(2) The total “amount” or “supply” of a financial asset is the total market value of it in existence: the number of shares outstanding times the market price. Asset “amount” or “supply” is therefore flexible for all assets except cash, whose market price is always unity. If there is more financial wealth that wants to be allocated into an asset than exists of that asset, the market price of each share of the asset will rise, which will expand the supply of the asset so that the demand can be satisfied."

"Money is not something that can go into or come out of assets; rather, it itself is an asset that is traded for other assets. The offered rate of exchange is the price. Changes in the price can create the perception that money is moving, but, in reality, nothing needs to be moving at all. Any movement that does occur is incidental to the underlying process.

Likewise, investors cannot leave or enter any asset class. All they can do is fight with each other over who will hold each asset class, offering to exchange money at various rates in exchange for the…

To answer your question, I found this work [1] that uses yield curve information and a basic 200-day moving average. The rule it uses is simple: Go to cash if: (1) yield curve of 10-year treasury minus 2-year treasury has inverted and (2) S&P is below 95% of its 200-day moving average and (3) the next recession has not yet occurred. If in cash, buy if S&P is above 103% of its 200-day moving average.

As can be seen, based on historical data from 1950-now the yield curve signal beats S&P 500 marginally (+110 basis points annually). However, I would not implement it as is, because this could be noise. Looking at the two tables above, the yield curve + 200MA strategy exhibits a problem commonly seen using these types of moving average strategies--whipsaws--which means buying in at a price and being forced by the strategy to sell at a lower price. In table 1, Buy in at at 65.24 and sell at 62.93 is an example of a whipsaw. [2] is an excellent resource if you are interested in learning more about these types of strategies.

[1] https://seekingalpha.com/article/4183120-superior-investment-returns-courtesy-yield-curve?page=4

[2] https://www.philosophicaleconomics.com/2016/01/gtt/

US Middle Class real median household income DOWN :
https://research.stlouisfed.org/fred2/series/MEHOINUSA672N

Cost of employees as percentage of sales down :
http://www.philosophicaleconomics.com/2015/05/profit-margins-in-a-winner-take-all-economy/
Specifically : http://i2.wp.com/www.philosophicaleconomics.com/wp-content/uploads/2015/05/ae3a.jpg?resize=640%2C362

labor bargaining power has weakened substantially amid globalization

US citizens not as enthusiastic about more immigration as are the US elite: http://www.cnbc.com/id/100593528

as recently as 2012, 69 percent of those surveyed agree that "we should restrict and control people coming to live in our country more than we do now."

The MSM often only presents one side of the story.

There is NO evidence of US labor shortage.
In fact, with stagnant to down real labor prices, the only logical conclusion is that there is a glut.

Corporate and Academic control of more and more guest worker visas is not really a great idea.

You don't have to wait until the bottom, but it's obviously better to buy assets when they are "cheap" rather than "expensive".

Valuation and long-term future returns seem indeed related historically
https://www.oppenheimerfunds.com/private-client-groups/article/asset-allocation-through-the-business-cycle/valuation-is-a-limited-predictor-of-asset-returns

For a more detailed treatment: https://personal.vanguard.com/pdf/s338.pdf

Of course this kind of arguments are not bullet-proof, see for example: http://www.philosophicaleconomics.com/2014/06/critique/

And one could have missed the last years of bull market applying these arguments already in 2013 (it doesn't mean that the conclusion was wrong with the 2023 horizon, though).

Anyway, ignoring valuation completely doesn't seem the right thing to do and people try to forecast returns to make asset allocation decisions: https://www.researchaffiliates.com/en_us/asset-allocation.html

I wouldn't call that market timing.

If you're looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: http://www.philosophicaleconomics.com/2013/12/the-single-greatest-predictor-of-future-stock-market-returns/

This is a long read, but it's worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basically, the average investor portfolio allocation to equities versus bonds and cash is inversely correlated with future returns over the long-term. This works better than pure valuation models because it accounts for supply and demand dynamics.)

[1]: http://www.philosophicaleconomics.com/2013/12/the-single-greatest-predictor-of-future-stock-market-returns/

[2]: http://research.stlouisfed.org/fred2/graph/?g=qis

[3]: http://www.multpl.com/shiller-pe/

There are much, much better ones:

1) Philosophical Economics' stock/bond/cash preference model:

http://www.philosophicaleconomics.com/2013/12/the-single-greatest-predictor-of-future-stock-market-returns/

https://financial-charts.effingapp.com/

2) John Hussmann's non-financial market cap to gross value added:

https://www.hussmanfunds.com/category/comment/

https://www.hussmanfunds.com/comment/mc210715/

But as the sibling comment and all the sources above say, those do not predict the path, only the destination (which is a decade or more in the future). It would be completely consistent with such macro valuation models if, for example, the general prices doubled or even quadrupled over the next year or two, why not. Stay safe out there :)