The warnings about the Wall Street crash are getting stronger: Wall Street crash increased warnings precarious market - 9 signs that demonstrate the precarious situation of the market.

We have not yet emerged from the deep economic crisis that the coronavirus pandemic has left in its wake and the run of a new one is already ringing. And its origin would be more similar to that generated by the crash of 29 than the COVID-19, so stock market investors are lately taking steps with leaded feet.

For some time more and more voices have been warning about a stock market crash. Whether these voices are ominous, or not, time will tell, but for now, we can look at 9 indicator charts that draw a precarious scenario for stocks in the stock markets.

Wall Street crash increased warnings precarious market

The US S&P 500, considered the index that best reflects the market situation, has risen more than 90% since the lows of March 2020, in the largest historical recovery in the bear market.

However, the tone on Wall Street seems to have suddenly changed, from blatantly bullish to extremely cautious.

This has been accentuated by markedly bearish investors. One of them, Michael Burry, the protagonist of the film The Big Bet, based on his life, has been one of the voices that have called for a downward valuation of the shares.

Wall Street crash increased warnings precarious market

warnings to the population about the Delta variant of the coronavirus have made a dent in the markets. For example, last Thursday the index of Standard & Poor's fell by 1% in the US due to the advance of the Indian strain in some areas of the North American country.

Also, inflation has grown more than expected over the last 2 months, and could do so again, in the absence of the June US consumer price index being published this week. This could trigger the yield of the bonds, which could cause a withdrawal of the shares. In addition, the Federal Reserve could reduce asset purchases earlier than expected.

It is precisely because of their extraordinary recovery that stocks are now in such a precarious position, vulnerable to a host of threats and with their values inflated.

But, then, is the bag really about to crash? It is impossible to know for sure, but some indicators do not paint a very flattering picture.

While the indicators are nothing more than a still picture and the markets are whimsical, below we can see the main conclusions drawn from some charts.

1. Schiller price / profit ratio

Schiller's price-benefit ratio for the S&P 500 index is one of the best-known ways to measure market valuation in general. It is currently close to its all-time highs, close to the level it reached during the heyday of the dotcom bubble, of dire results. High valuations usually mean relatively moderate future returns.

2. The Warren Buffett indicator

The total capitalization of the stock market compared to gross domestic product (GDP), commonly known as the Warren Buffett indicator, is also at all-time highs. Billionaire Buffett likes this indicator because it gives investors an idea of how much stock performance is tied to real economic growth at any given time.

Wall Street crash increased warnings precarious market

3. Indicator of irrational exuberance

Beyond indicators based on market valuation, there are a number of mood gauges of investors that show extreme optimism. One is the Irrational Exuberance Indicator from Bespoke Investment Group. It currently shows that investors are concerned about market valuations, but still believe that stocks will rise within a year. The indicator of irrational exuberance is at historically high levels.

The head of strategy at Real Investment Advice, Lance Roberts, has recently summed up in a rostrum that " in simple terms, investors are as optimistic as they can be."

4. Cycle of feelings

Lance Roberts has also highlighted the Sentiment Trader sentiment cycle and pointed out that all the criteria to be within the "enthusiasm" section are currently being met, in dark green in the image. This could mean that investors will soon go into "panic" mode, in red.

Wall Street crash increased warnings precarious market

5. CBOE bias index

Roberts has also highlighted the relevance of the CBOE bias index, which measures the level at which investors perceive risk or are concerned about risk. It is currently at an all-time high, meaning investors are very concerned about a possible unforeseen catalyst that will derail markets.

6. Average price / revenue ratio per decile of S&P 500

Fund manager John Hussman has recently warned that the ratio of price to average sales revenue for each decile of the S&P 500 is at all-time highs. This stock market valuation measure suggests that the stock market is highly valued as a whole, and not just a small part of it.

7. VIXEN

The Chicago Board Options Exchange volatility index, or VIX, which measures expected volatility in the stock market and tends to move in the opposite direction of the S & P 500, could skyrocket. This is what voices like Morgan Creek Capital hedge fund manager Mark Yusko portend.

Also that of Sven Henrich, founder of NorthmanTrader, who has pointed out during the last weeks that he expects an increase in volatility in the future.

8. Insider trading

Mark Yusko has also pointed out that insider trading is on the rise in recent times.

"Those who have privileged information know more about companies than the investors themselves" he has recently pointed out in a video in which he added that "the sale of privileged information is the highest that has ever existed and there is a reason for it".

Wall Street crash increased warnings precarious market

9. Bank of America Sell Side Indicator

Finally, Bank of America's July 1 Sell Side indicator, which measures stock strategists 'share allocation recommendations, has shown that investor sentiment haunts the territory of" extreme optimism, " represented by the red line.

This indicator is now almost as close to the red line as it was when the global financial crisis erupted in the last quarter of 2007.