Two signs that the market may be near a top

As if rising geopolitical risks, rising interest rates and weak global growth isn't enough to worry about, there are signs that asset prices, broadly speaking, are getting toppy.

Two cases in point … the art and real-estate markets.

Man on mountain top
Toltek | Getty Images

While a Modigliani nude sold for $170 million at Christie's Monday night, the second highest price ever paid at an art auction, recent sales at Sotheby's have been disappointing, a sign that the once red-hot art market may be cooling. Indeed, despite the eye-popping price for the Modigliani nude, prices at Christie's auction were quite volatile as art buyers, becoming increasingly selective, left some important works on the shelf.

Shares of Sotheby's have been volatile as well, falling from their most recent 52-week high of over $47 a share to just over $32 on Monday, reflecting a disappointing auction season thus far.

The art market tends to rise and fall with the stock market's fortunes, although art prices might be more closely tied to the fortunes of new entrants into the market. A Chinese billionaire bought the Modigliani, but a general retreat by Chinese investors could be behind the emerging weakness in art prices. Hence, prices could be somewhat more divorced from U.S. market action and more indicative of weakness in China.

In 1989, the year in which the Nikkei hit its all-time high, Sotheby's shares were quite closely tied to Japanese equity and real-estate bubbles. The art market, back then, crashed along with Japan.

I watch the art market as an impressionistic indicator of market froth … as we have seen in recent market cycles, when prices peak, and then weaken, it is time to van Gogh!

Similarly, we are beginning to see evidence of toppiness in both the residential and commercial real estate markets in the hottest areas of the country. Real estate can top out and lead to trouble in other markets, particularly if interest rates begin to rise.

Like stocks, real-estate valuations can shift quickly when rates move higher. In a market where we see record high rents in the multi-family sector, and record low capitalization rates in commercial real estate, there are signs of excesses in the market that give one pause.

(In real estate, cap rates are like price/earnings ratios for stocks. However, unlike P/E's, the lower the cap rate, the higher real estate valuations are said to be.)

Billionaire landlord Sam Zell's decision to sell off a portion of his residential real-estate holdings is one indicator of a top in the multi-family sector. A notoriously good market timer, Zell's sale of his entire commercial real estate portfolio before the 2008 crash should have been a warning to other investors at the time. It was not heeded.

In addition, the folks at Strategas Research have pointed out recently that commercial mortgage-backed security spreads have begun to widen, an indicator that stress is building within the commercial real estate market. While not a red flag quite yet, it is a yellow light that suggests stress could turn into distress if rates rise too much, or the economy weakens too quickly.

The art and real estate markets tend to move in tandem, often driven by hot money looking for a home.

Whether it is newly minted billionaires in the buyout world of the late 1980s, the new rich of Japan in that same period, hedge-fund titans of recent vintage, or Russian oligarchs and Chinese mandarins today, these markets are looking toppy and should be watched closely for clues as to where equity markets may move next.

It's not a full-fledged sell signal, but it may turn into a real one really soon.

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.