NEW YORK ( TheStreet) -- In May the major equity averages appeared to have peaked in the May 20/May 22 time frame. The problem then was that all five of the major equity averages were not in sync to confirm those highs. My conclusion was if you can't confirm the highs then new highs will follow.
Today we are in a similar situation with the Nasdaq setting new multi-year highs, while the other four remain shy of their August highs; 15,658.43 for the Dow Industrial Average set on Aug. 2, 1709.67 for the S&P 500 set on Aug. 2, 6686.86 Dow transportation average set on Aug. 1, and 1063.52 Russell 2000 set on Aug. 5.
The Nasdaq has the power to pull the other averages higher given a weekly close above my semiannual and monthly risky levels at 3759 and 3772 vs. Thursday's new multi-year high at 3731.84.
Fundamentally the stock market has been trading under a ValuEngine valuation warning at least since the May highs. Today we show that 76.7% of all stocks are overvalued 42.8% by 20% or more. Fifteen of 16 sectors are overvalued, 13 by double-digit percentages, of which 10 are overvalued by 20.7% to 32.4%. Sector price-to-earnings ratios have become elevated between readings of 17.4 to 31.0.This week I covered the housing market and banking system using data from the FDIC Quarterly Banking Profile for the second quarter. The PHLX Housing Sector Index