Liquidity starvation may argue for a total market collapse at some point, but certainly not valuations alone. Most of the major averages are simply a mirage. The dichotomies that exist make generic analysis fools gold. The fact is that the valuation gap is huge. The over owned tech favorites sell at ridiculous levels.
Valuation is a joke.
For the second tier has-beens, it's another story. Historically, common stocks have averaged roughly an approximate 13x's multiple, so these numbers really do say that the typical or average stock in the US is not overvalued. They are also where the bulk of market risk resides. They are also massively over owned institutionally. After all, they are sooooooo diversified.