You know that feeling when something doesn't quite add up in the markets? I've been watching a lot of nervous energy lately, and honestly, there's some data that's hard to ignore.

Recent surveys show about 72% of Americans are pretty pessimistic about the economy right now. And nearly 40% think things will get worse over the next year. That kind of sentiment matters because it often precedes actual market moves.

Here's where it gets interesting. Two major valuation metrics are flashing yellow lights that a stock market crash could be brewing. The first one is the Shiller CAPE ratio for the S&P 500. This measures earnings adjusted for inflation over the past decade. Right now it's sitting around 40 — and that's the highest level since the dot-com bubble more than two decades ago. For context, the long-term average hangs around 17. When this ratio peaked in 1999, we all know what happened next. Same story in late 2021 before the bear market kicked in.

Then there's the Buffett indicator. Warren Buffett himself has pointed out that when this ratio hits 200%, you're basically playing with fire. And where are we now? Around 219%. That's higher than where we were in late 2021 when the market rolled over.

Does this mean a crash is definitely coming tomorrow? No. Markets can stay irrational longer than you'd expect. But the warning signs are there, and I think it's worth paying attention to.

So what do you actually do about it? The honest answer is that the best defense against any market downturn is owning quality companies with real fundamentals. If you're holding stocks with strong balance sheets and actual earnings, you'll sleep better when volatility inevitably shows up. History shows that good businesses tend to recover and keep growing even through rough patches.

The bottom line: keep your portfolio focused on substance. When the next stock market crash does come — and eventually one will — you want to be holding companies that can weather the storm. That's how you survive the volatility and actually come out ahead.