"Among the many largely equivalent ways to define an overvalued, overbought, overbullish syndrome ... Shiller P/E anywhere above 18 (overvalued), SP 500 at a 5-year high and at least 8% over its 40-week smoothing (overbought), with bullish sentiment greater than 50% and bearish sentiment less than 20% based on Investors Intelligence figures (overbullish). ... Notice that we’ve observed three instances this year – in May, in August, and today. ... In any event, I continue to believe that it is plausible to expect the SP 500 to lose 40-55% of its value over the completion of the present cycle, and suspect that whatever further gains the market enjoys from this point will be surrendered in the first few complacent weeks following the market’s peak."
http://www.hussmanfunds.com/wmc/wmc131104.htm
The author, John Hussman, made a similar call in April 2007, and the market actually crashed in September 2008. So he isn't predicting one, just saying that it is "plausible".
I still think that a decline in NYSE margin debt is a good leading indicator. It gave off a false signal in May, when it declined slightly from April, so it is not perfect.
The reason I say next summer is that the Fed will start to taper QE by next Spring. I think that even a taper could cause a stock market crash. I think the Dow still has a ways to go before it reaches a high, and will reach 16,000.
Warning: your mileage may vary.
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