Bill Fleckenstein says that stock valuations have risen to absurd levels on the back of low interest rates. But though he remains staunchly bearish on equities, he still believes that it's not yet time to get short.

Valuations on certain tech stocks are "ridiculous—it's just plain ridiculous," Fleckenstein said on Tuesday's episode of "Futures Now." "But that doesn't really matter. Overvaluation, no matter how gargantuan, does not make stocks go down."

"When you get to a place where groups of securities can get wildly overvalued, usually that continues until they exhaust themselves, or until some monetary phenomenon upsets the apple cart," the noted short seller continued.

"But there can be no debate about absurd valuations. And you can't use zero percent interest rates as a justification, because the only reason rates are at zero percent is because of the same Fed that has caused the stock market to be infected with lunacy again."

Fleckenstein closed down his short strategy fund in early 2009. Recently, he has been raising money to restart his fund and short tech stocks. Still, he says the time is still not right to express his bearish thesis.

"If you want to take a speculative shot, it might make sense to short an index or something like that. But for my purposes, in terms of wanting to be short for more of an investment standpoint, I really need more things to go on for me to really want to dig in and think it was safe to be short," Fleckenstein said. "It's been too dangerous, despite lots of reasons to want to be short."

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Still, once the decline comes—watch out.

"The fact of the matter is that overvaluation doesn't make stocks go down. It just increases the risk of how far they can go down once they start going down," Fleckenstein said ominously.