Stock market crash: Expert warns 70% drop coming as indicator falls - Business Insider

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A notorious market bear who called the dot-com bubble says he sees ‘fresh deterioration’ in the market indicator that first signaled the 1929 and 1987 crashes — and warns that stocks are ripe for a 70% drop

both recently warned that investor sentiment is approaching extremes, making stocks vulnerable to a sell-off.

"Where you tend to get a bigger problem is if sentiment is really, really elevated, and then you start to see a brisk deterioration in the market but sentiment just stays optimistic,""That to some degree is what happened in the early part of 2000," she added. "You started to see some underlying deterioration in what was going on in the market, but sentiment was like, 'nope, doesn't matter, it's a new paradigm.

An indicator that measures "market behavior in 'debt securities of varying creditworthiness,'" has started to weaken as it has before previous market crashes, he said in his most recent market commentary posted on January 18. "In 1987 and 1929, the ascent to the bull market peak was so steep and indiscriminate that there was little 'divergence' in the equity components at the highs," he continued. "Instead, the equity components shifted only after a sharp, near-vertical initial loss."

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Seems the game has changed now. Now central banks are buying stocks with printed money..!!

What are better options then?

JohnBlackTweets DelphiConsults JaneMuras

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