Robert Shiller, who has a pretty accurate gauge of stock market valuation (The CAPE model), came out recently reiterating how the market appears overvalued.
In this New York Times article, he details how the market is at its highest level, matching levels not seen since 1929, 2000 and 2007.
The problem is, predicting the stock high is trying to determine how high is up. Yes the market may be overvalued, but until it turns you never know how close the top is. So it could run alot higher. Notice from the CAPE chart below that we appear to be way below the irrational exuberant highs of 2000:
The current CAPE is around 25 – it was at this level in 1996 and 2005, so indeed we could have a few more years before valuation reverts to the norm. But this is like a game of musical chairs, whereas when the music stops and people rush to get out, you wont want to be left standing alone. And given the Fed is still making asset purchases as part of the economic recover from the last big market correction in 2008, if the fall happens anytime soon, it could be a bad one.