I have been arguing that the stock market is incredibly overvalued for quite some time now. This conclusion can be very easily ascertained from studying Shiller’s Adjusted S&P P/E chart below. To very quickly summarized, today’s valuation levels are the highest in history. Higher than 1929 and higher than 2000 if we adjust for tech earnings distortions.But wait a second, it gets a lot worse…… 

With that in mind quite a few bulls are beginning to acknowledge the fact of overvaluation while admiring they are playing the game of musical chairs. For instance…

Two-thirds of U.S. investors think stocks are overvalued

Nearly two-thirds of investors—65%—say the U.S. equity market is overvalued, the highest percentage on record.

All of the above brings out an important question……

If most investors believe the stock market is overvalued, as they consciously continue to play on the long side, how fast/powerful will the upcoming decline be? 

Well, Murphy’s Law and the stock market history suggests the door will be slammed with incredible speed. Yes, I am talking about a powerful crash that will wipe up years of gains in a matter of days. If not hours.

In other words, those who think they will be able to exit in an orderly fashion once the market confirms breakdown are kidding themselves. All exit doors will be shut close in an instance. The market suggests this is the only possible outcome at this point.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.