The U.S. stock market is in an amazing shape. Every day new all-time highs are set. This MUST be bullish, and investors should go all in, right? Well, not that fast, at least not in our opinion. We see many signs that this rally is getting overextended, from an historical perspective. While we clearly said a year ago that we were bullish for this year, we did not see any stock market crash coming (a year ago). Right now, we are now on record with a forecast of a stock market crash in 2018, and it could take place as early as the first weeks/months of 2018.

So far, in all openness and transparency, our warning signals for a mini stock market crash in November were invalidated. We were horribly wrong in terms of timing. However, we still believe that there is a huge risk brewing for a mini-crash. The stronger the current rally, the stronger the fallback.

Yes, we do expect a strong mini-crash in the stock market in 2018, starting early 2018. Central banks will likely step in to avoid a similar chaos as in 2008/2009, so we don’t forecast the end of the financial system.

We do however believe a very stiff correction will take place which potentially could bring a buying opportunity (to be confirmed at that point in time based on intermarket dynamics). More likely, however, we believe that money will rotate out of U.S. stocks into emerging markets. That is why we are very bullish emerging markets in 2018.

The first warning signs of a stock market crash

We published the following warning signs starting in August:

  • Is Volatility Making A Higher Low Here?
  • Volatility On The Rise As Expected. What’s Next For Stocks?
  • Ignore This Series Of Volatility Warning Signs At Your Own Peril
  • Volatility Hit Historic Lows This Week. Maximum Complacency Is Bearish!
  • But the number of concerning indicators is accumulating now. Yes it may sound as foolish as it can be, that, right during a strong bull market rally, InvestingHaven’s research team talks about concerning indicators. But let’s first deep dive before you come to a conclusion.