Hussman Funds Chief Sees Warning Signs of 50-70% Stock Market Crash

Hussman believes stock valuations are extremely high historically, indicating poor future returns. His models show S&P 500 likely to return -5% annualized over next 12 years.

Hussman's "market internals" indicator, which measures investor sentiment, is flashing warning signs similar to prior major market selloffs.

Various technical indicators suggest the market is "overextended" and at risk of an "abrupt air-pocket, panic or crash," according to Hussman.

Hussman believes combination of high valuations, poor internals, and overextension point to 50-70% market decline before bottom.

While extreme, Hussman has history of calling past market peaks and crashes. But his fund's recent returns have lagged significantly as markets march higher.