More Videos:

New All-Time Highs in an Overvalued Market

Tickers in this article: GOOG KO MMM MSFT PHM UTX ^BKX ^HGX
NEW YORK (TheStreet) -- New all-time highs were set Thursday at 15,589.40 Dow industrials, 1693.12 S&P 500, 6595.90 Dow transports and 1052.46 Russell 2000. The Nasdaq set a new multi-year high at 3624.54.

On Tuesday the Dow industrial average traded below my monthly pivot at 15,437, but the close that day was above that milestone. This was a key to the climb to new highs as Fed Chief Bernanke provided dovish comments to the House on Wednesday then to the Senate on Thursday.

After the close on Thursday disappointing earnings from an old technology stock Microsoft and a new technology stock Google established the thought that negative earnings reports could trump the Fed's easy money policy.

In my opinion it will be difficult to continue these new all-time highs given the severity of the ValuEngine valuation warning. Today 76.1% of all stocks are overvalued with 43.6% overvalued by 20% or more. We show that 15 of 16 sectors are overvalued, 13 by double-digit percentages.

My monthly pivots are 15,437 Dow industrials, 1669.0 S&P 500, 3510 Nasdaq and 1030.75 on the Russell 2000 with my monthly risky level at 6758 Dow transports.

My quarterly value levels are 14,288 Dow industrials, 1525.6 S&P 500, 3284 Nasdaq, 5348 Dow transports and 863.05 on the Russell 2000. My semiannual risky levels are 16,490 Dow industrials, 1743.5 S&P 500, 3759 Nasdaq, 7104 Dow transports and 1089.42 Russell 2000. My annual value levels are 12,696 Dow industrials, 1348.3 S&P 500, 2806 Nasdaq and 809.54 Russell 2000.

There's a lot of room between these annual value levels and the semiannual risky levels. In Dow terms the upside is 941 points, or another 6.1%. The downside is 2,853 points, or 18.3%.

Here are my asset allocation ratings for the 16 sectors at ValuEngine:

Aerospace: Underweight -- (78 stocks) Only three stocks have buy ratings and 53 stocks or 67.9% are rated strong sell or sell.

Auto-Tires-Trucks: Underweight -- (95 stocks) Only two stocks have buy ratings and 31 stocks or 32.6% are rated strong sell or sell.