Here's some bad news for those sniffing out a bargain in stocks: even after a horrendous week, the market is still trading at an elevated valuation by historical standards.
The S&P 500 slid 5.8 percent in the past week for its worst week since September 2011, taking the large-cap index negative over the past year.
That has some looking to buy. On Friday, Kevin Landis of Firsthand Capital Management said that "all you can do now is try to take advantage of it—take a deep breath, take a look at the lay of the land, and you're going to be glad you did six months from now."
Similarly, Bob Doll of Nuveen Asset Management said Friday that "If you've been one of these people that's been on the sideline as many have waiting, waiting, waiting to put some money in—for goodness sake take advantage and put some money in."
But there's a problem with getting into stocks based on the premise that the recent slide is creating an attractive value proposition.
At Friday's close, the S&P 500 traded at 16.1 times analysts' estimates of the earnings that companies will report over the next year, according to FactSet. This metric, known as the market's forward price-to-earnings ratio, has indeed fallen over the past five months. But it is still well above its ten-year average of around 14.
The backward looking last-twelve-months P/E ratio, which compares current prices to the earnings companies actually reported, is sitting at 17.5. Like the forward P/E ratio, that's not only above historical averages, but above where it was a year ago, per FactSet.
"That strikes me as high," commented David Blitzer, chairman of the S&P Dow Jones Index Committee. "We're in a situation where the valuation does get worrisome, especially since there have been questions about U.S. earnings," given concerns around China and the rest of the emerging markets.
"Some kind of a correction was due," he told CNBC in a phone interview.