First, no need to worry about taxes (IRA) or trading fees (Vanguard index funds).
Second, I see the same basic truths and don't disagree. In fact, I do a little gut-level market timing myself (I've recently started putting excess funds toward the mortgage (4.25%) rather than a taxable account). So I certainly see your position.
However, I have not sold any stocks. In fact, I am continuing to contribute to my tax-favored accounts. Here's why:
1) I do not know enough about the underlying economic principles to really say that the market is overvalued. I do know CAPE has some serious flaws.
2) Even if I did know everything there is to know, I face the prospect of irrational exuberance. Let's use the defining example. In December of 1996, Fed Chairman Greenspan coined the phrase "irrational exuberance" in reference to the stock market. The last few years had seen a doubling of the market with CAGR of about 20% (with dividends reinvested). People were investing in all sorts of ill-advised internet startup companies. Frankly, that a bubble was forming was not a secret. Yet, what would have happened if you had taken the Fed Chairman's words to heart and pulled out of the stock market? Over the next few years, as your money sat on the sidelines, you would have missed a doubling again of the market. And if you held all the way through the nadir in October 2002, your investment would have still returned approximately 4% per year. The lesson here is even though you know it is going to happen, you don't know when it is going to happen.
So, that's my philosophy. If you don't want to invest in stocks with your IRA, I would suggest as an alternative total bond over the money market, as you have a much better chance of getting a somewhat decent return. This would correspond with your #3.