R Sivanithy's story Bullish Wall St Outlook in Doubt on The Business Times (the link may be expired; you may try to search for the article name in Google and fetch a cached copy) lists four major measures all pointing to an overvalued market:
1. P/E Multiple
"According to a Feb 4 article in Britain's Financial Times, the cyclically-adjusted PE of the S&P 500 index - the ratio of the value of the index to the moving average of real earnings - is now 70 per cent above its long-term mean."
2. Price-to-Book Ratio
"According to Bloomberg's financial service, at Monday's close of 1,145, the S&P sold for 3.2 times book value. For comparison, consider that the price-to-book for the UK's FTSE is 2.1 and for the Nikkei 225, 1.9."
3. Fed Model
"According to Bloomberg, the consensus estimate is for S&P 500 companies to earn US$55 per share this year after adjusting for options - a figure that gives an earnings yield of 4.8 per cent. The 10-year bond has been trading at a yield of about 4.1-4.3 per cent for several weeks now. The gap is, therefore, not large, and if anything, it suggests that US stocks may be close to the upper end of their valuations."
"The latest Q-ratio data is available at www.smithers.co.uk/keydata.shtml - where researchers state that when the S&P traded at 995 last June, 'the market was selling at 1.46 times its long-term average and thus needs to fall by 31 per cent to reach fair value'. Note that since then, the S&P has risen 14 per cent, so any overvaluation would have risen further."