Shiller's not saying that's going to happen soon, just that the CAPE ratio is flashing a warning signal.  "I have a general bias towards down because the market is overpriced, but these things unfold over years," he said.  As examples, he points to a CAPE reading that peaked at 44 in 2000—just before the Internet bubble burst. After rising again in the 2000s, the CAPE ration peaked at 27 in 2007 before the market staged another big pullback.  But while current CAPE readings are substantially higher than their long-term average, that average extends back more than 140 years, during a period with the U.S. economy, corporate taxes and stock investing was very different than today. That's why some market analysts argue the CAPE index should be taken with a large grain of salt.  Read MoreMarket 'aftershocks' are coming: Robert Shiller  The use of a 10-year average profit reading, for example, understates stock values because economic downturns have gotten shorter and expansions are longer in recent years, according to Minnesota State University finance professor Stephen Wilcox.  "The problem with using a moving average that is longer than the business cycle is that it will overestimate 'true' average earnings during a contraction and underestimate 'true' average earnings during an expansion," Wilcox wrote in a 2011 AAII Journal article.  CAPE critics also argue that long-term changes in U.S. accounting methods, corporate taxes and reporting rules for earnings make it impossible to compare today's profit levels with those from 100 years ago. As a result, they argue, investors shouldn't put too much stock in the ratio's long-term average.  There are also other measures that present different ways to benchmark of stock values.  One is the government's measure of corporate profits contained in the quarterly data the Bureau of Economic Analysis collects to track the growth of the overall gross domestic product. By comparing that measure to the overall stock market's value (as measured by the Wilshire 5000 stock index), a somewhat different picture emerges.  In the run up to the 2000 Internet bubble, stock prices continued to surge even as overall after-tax profits were falling. In the early 2000s, stock prices and earnings came back into line, rising in the early half of the decade and then falling sharply as the Great Recession took hold.  Since then, profits have led stock prices higher. But corporate profits have largely stalled in the last three years, and have fallen since the start of the year even as stock prices continue to rise.
Some key measures of stock values are flashing signs that stock prices may have gotten ahead of themselves. A lot depends on how you read the signals.