Lets take a look at the stock market. Stocks right now are at what I would call an extreme level. In fact, if you look at how stretched the stock market is above the 200 day moving average, we are now at the highest level since January 2018 which ended very badly. In fact, even levels that were much milder than where we are today ended badly.
I am not recommending that we short stocks. Shorting the stock market can be very difficult. If you wanted to short stocks, I would recommend buying puts instead. Probably the more sensible thing to do would be to keep our eyes on assets that have tremendous potential from levels considered much closer to average such as Bonds and Gold which should rebound once stocks drop.
Just today, the 30 year bonds have reached the 200 day moving average. There is not any sort of buy signal yet, but we are much closer.