I fully realize that "crash" is a very strong word full of all kinds of very definite connotations, but I really can't think of any other way to articulate what is happening. Whenever the wizards at the Fed run the proverbial printing presses to create more dollars out of thin air, those inflationary dollars have to seek out a new home and a great deal of them begin bidding competitively on the already overvalued US equity markets. It is no coincidence that the S&P 500 bubble really ignited after the Fed began aggressively goosing US money supplies in 2002! Any way you slice it though, the fundamental and technical case for the S&P 500 is certainly for another serious downleg approaching, probably carrying us to the ultimate bottom. Once the mighty index trades below 1000 or so for a few weeks, the selling pressure will probably intensify immensely as fear increases and investors and traders decide discretion is the better part of valor for now. Bear markets typically evolve in three phases. First, the market declines 20% or so but everyone believes it is just a "correction" in a primary bullish trend and no one is concerned. Second, as the decline continues, investors on the periphery of the markets (ie, not mainstream long mutual fund holders) gradually grow fearful and selling pressure intensifies. Each successive major rally fails and new interim lows are carved out. Finally, in the horrific capitulation phase, mainstream investors have reached the outer limit of their pain tolerance and patience and clamber to sell at any price and vow to never, ever even think about owning those infernal stocks again. With the S&P 500's enormously-overvalued P/E ratio and immensely bearish technical breakdown, I can't help but think that the professionals are selling out like crazy leaving the folks the Wall Street crowd call "suckers," the mainstream working American middle-class with their precious retirement and college savings in the markets, left holding the bag, which is emptying fast. It is truly a tragic sight to behold, but this is the way these supercycle busts always work in history too yet virtually no one seems to heed their hard lessons. While us private investors can't save the world, we can zealously try to transcend the real-world of popular opinion on the markets. Rather than living in the confusing world of Wall Street lies and perpetual promises of "the bottom is in" or the profit recovery will roar forth "next quarter," investors can seek to understand the markets as they really are. The markets could not care less about you or me, they just exist. Only by understanding the markets in their actual strategic historical context, with mighty cyclical overvaluations giving way to gaping cyclical undervaluations over decades, can investors successfully beat the market year after year. The few investors outside the Matrix are the contrarians, who fervently strive to understand greed, fear, valuation, and history and do not buy into all the hype and obnoxious lies that mainstream investors eagerly lap up like famished kittens.