This stock market indicator just flashed a warning not seen since the dot-com bubble

Stocks have entered valuation waters last seen during the dot-com craze of the late 1990s.

The S&P 500 ( ^GSPC ) has hit its second-most expensive valuation in history, as measured by the Shiller P/E Ratio, better known as the CAPE ratio.

This valuation metric measures the price of a stock index relative to its average inflation-adjusted earnings over the previous 10 years.

As it stands today, the CAPE ratio far surpasses the Crash of 1929 and is only slightly behind the levels seen during the dot-com bubble. The CAPE ratio peaked at about 44.19 in November 1999, at the height of the internet bubble, then went on to plunge to 21 by January 2003.

The S&P 500, pushing to a fresh record this month, has sent its dividend yield to the lowest level in history at 1.04%, per Yahoo Finance AlphaSpace analysis.

The dividend yield on the S&P 500 measures the total annual dividend income generated by the companies in the S&P 500 index relative to the index's combined market value.

A market could stay "overvalued" for a while. And as you sit there and wonder if the market is overvalued and poised to crash, you will likely miss out on more upside.

Stay invested. Let the pundits try to pick market tops and bottoms.