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This Chart Shows Dow Should Be Lower...a Lot Lower

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City.
Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City.

While earnings have grown only modestly over the past few quarters, stock prices have surged, sending what could be a disconcerting message to investors.

The Dow industrials, in particular, have seen a 17 percent jump in 2013 alone even as earnings in the past two quarters have grown little.

That trend disrupted a formerly symbiotic relationship between earnings and stock prices and is indicating that the bluechip average is in for a substantial pullback, according to Tom Kee, who runs the StockTradersDaily investor web site.

"They've been moving in tandem since 2009, until recently. Earnings per share for the Dow Jones industrial average have flatlined and the price has taken off," Kee said. "There is something happening here that defines a bubble."

(Read More: Rallies End Sometime, but This One May Not End Soon)

After being stuck at $19.17 a share in early 2009, Dow earnings jumped to a peak of $36.15 in 2012.

But they've stayed in that range over the past two quarters, hovering around $35 and most recently at $34.84 in the first quarter.

A similar situation has happened on the Standard & Poor's 500, which saw first-quarter earnings increase 5.1 percent on revenue growth of just 1.1 percent.

At one point not long ago, earnings for S&P 500 and the price surge from the 2009 lows were nearly identical, but that relationship also has begun breaking down.

(Read More: Market and the Economy: What the Fed Is Missing)

The Dow has been at the front of the major averages in gains.

Kee fears that won't last, though, with the 30-stock index set to tumble to around 13,500, which is the level where the price-to-earnings ratio started to break down.

"This is looking at the parallels," he said. "If this thing is expected to continue to be parallel, with the same relative relationship, then the actual price on the Dow Jones industrial average should be much lower than it is."

Worries over whether the market is getting overheated have begun to creep into investor sentiment surveys.

(Read More: JPMorgan Goes All-In on Rally; Sees Surge Growing)

The American Association of Individual Investors reported that bullishness—expectations the market will rise over the next six months— last week fell a full 13 percentage points to 36 percent, while bearishness rose to 8.1 percentage points to 29.6 percent. Neutral sentiment gained 4.9 percentage points to 34.4 percent.

The Investors Intelligence survey, which polls newsletter editors, remained optimistic though slightly less so, with bulls outnumbering bears 52.1 to 19.8 percent.

—By CNBC.com Senior Writer Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.

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