There is a saying that a rising tide takes everything higher.The domestic market is going through a similar phase right now, wherein global liquidity has taken everything higher while the fundamentals have not really improved.Analysts expect valuations to remain elevated for some more time. Traders should not go short on the market based on 10-year average valuation.“It appears that earnings and valuations are two different worlds. Earnings are facing the gravitational pull of weak demand and other earthly issues, while valuations are in a gravity-defying (and risk-free) world,” Kotak Institutional Equities said in a note.The Nifty50 index is trading at 19.3 times FY2017E EPS and 15.9 times FY2018E EPS, which is slightly above its 10-year long-term average.Given that the laws of physics (and gravity) no longer apply to valuations right now, analysts have turned their focus on earnings, the other meaningful driver of stock prices.The GST bill , which was cleared by the Rajya Sabha on Wednesday, is an important piece of legislation, which is expected to result in smart savings for companies and will start reflecting on earnings once the bill is implemented across states over the next two years.Even though earnings do not reflect any meaningful recovery, the passage of the GST bill and expectations of economic recovery have boosted sentiment. Most analysts expect earnings to show double-digit growth in FY17 itself.“We currently project net profit of the Nifty50 companies to grow 14.7 per cent in FY2017 and 20.6 per cent in FY2018 on the back of (1) domestic economic recovery, led by consumption and (2) higher profitability in several sectors whose earnings have been beaten down by global factors and weak domestic demand,” said the report by Kotak Securities.However, FY2015 and FY2016 disappointed the markets and belied expectations. In June quarter, aggregate net profit of 760 companies that have announced their numbers has risen by just 5.7 per cent to Rs 62,916 crore.One of the reasons propelling the domestic market higher is global liquidity and domestic policy actions such as GST, which can trigger further inflow into the equity market and boost growth, said experts.“India has always had the potential to grow at a rapid clip. However, the execution that was needed for it to realise its potential was always in doubt for international investors. But the GST bill and the bankruptcy bill proved to people that the government can walk the talk," Krishna Memani, CIO, Oppenheimer Funds, said in an interview with ETNow.The valuations could become more extreme in the short term due to further policy interventions by global central banks. Given the 'booster' forces of global central banks' monetary policies, valuations can stay at elevated levels, said the Kotak note."Even though valuations looked reasonable for the broader market on a forward earnings basis, valuations turned out to be much higher on actual reported earnings,” it said.Here’s what to look at if you have run out of ideas: