This metric set to trigger massive S&P 500 crash, expert warns

Core Insights - The S&P 500 is approaching a record high of 7,000 but may face a correction in the coming months due to volatility and liquidity concerns [1][2] Group 1: Market Conditions - The S&P 500 is currently trading at 6,941, reflecting a decrease of 0.33% [1] - The index's three-year bull cycle, which began after the October 2022 low, is nearing a critical turning point, with liquidity indicators showing warning signs [2] - Historically, major bear cycles have bottomed near the 200-week moving average, which the index has not retested since October 2022, indicating potential overheated market conditions [3] Group 2: Liquidity and Valuation - The M2 Global Liquidity Index is entering a cyclical peak zone, with historical peaks occurring roughly every four years, suggesting a potential market top around February 23, 2026 [4] - If liquidity is peaking, the S&P 500 could transition into a systemic bear cycle, with a typical retracement potentially pulling the index back toward the 200-week moving average, projected near the 5,500 level [5] - The S&P 500 earnings yield is near 100-year lows at around 3%, indicating that investors are accepting lower returns for exposure to U.S. stocks, which suggests stretched valuations [6][7]