I’ve warned for years, and with increasing frequency of late, that the first crash when a major stock bubble of this magnitude finally tops is 42% in the first 2.6 months.

That’s the average of seven bubble crashes in the last century.

The 1929 crash started off with a 49% crash in just over two months – the most extreme.

Look at this correction thus far, compared to 1929 for the Dow…

If it continues to follow the dramatic crash pattern of early September to early November 1929 then the most violent wave down could be starting now… and this first overall crash could be over by early December or as late as early January.

The target in that scenario would be at February’s crash low of around 15,500 on the Dow, down 42.5% from the late September top.

But here’s a scarier chart than that.

This one suggests that the smart money hasn’t been buying into the rally from February through September 2018 and could be leading the selling here, which would be ominous and increase the likelihood of such a 40% or so crash just ahead.

Look at this…

This index measures the buying into the close (calculated smart money) versus the buying right after the open (dumb money reactions).

This is both the sharpest and deepest crash in this indicator.

The drop in this index was 20% just before and into the early part of the 2000 tech crash. It was down 24% just prior and into the 2007-08 crash.

This decline is 38% and straight down!

If that is a correct measure of the smart money sentiment, then they not only didn’t buy into the rally that peaked in September while the dumb money was piling in the most, but they would be selling and shorting into this decline and on any bounces.

All of this is to warn you that the next two or three weeks is a dangerous period. 

Looking ahead…

If late September was a major top, then we should see a sharper deeper wave down any day and it may already have started. This continues to be a good time to hedge through options near term, as Rodney proposed in the November issue of Boom & Bust.

If we don’t see such a sharp crash by early December, it isn’t likely to happen. That would be the time to exit such option strategies as December is otherwise a good month.

Even if this imminent crash doesn’t happen, your hedging options could have some profits if the markets just go down more modestly. But you’d have to be willing to lose your premium if the markets head back up strongly instead.

Make sure you’ve read the latest issue of Boom & Bust for the details.

P.S. Check out the program that Rich Dad, Poor Dad author, Robert Kiyosaki, has developed. He and I have spoken at conferences together for many years. And we see eye to eye on the unprecedented economic danger ahead. You’ll find all the details you need about his program for generating impressive weekly cash flow here.

The Truth Exposed: The Future of the Markets & Your Wealth

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Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.