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There are plenty of negative signs lingering out there, some of which are being ignored by investors for the time being. Therefore, I’m leaning bearish over the longer term, as the market is simply overvalued.

For instance, a huge credit bubble has been developing in the Chinese economy, and the United States also has a credit bubble in federal debt as well as in private corporations. In the 1990s, there were 98 public corporations that held AAA credit ratings from Standard and Poor’s. Today, only Microsoft (MSFT) and Johnson & Johnson (JNJ) remain on that list.

There are 25 companies that have plenty of cash, but the rest of them do not, and the latter group includes about 2,000 companies with a cash-to-debt ratio of about 12%. In other words, these companies hold only 12% of cash for every dollar of debt they owe. That’s the worst this statistic has been in over a decade, which makes sense given the fact that interest rates are near zero, as borrowing on the cheap generally leads to inefficient use of invested capital.

So if the economy weakens, or if we see any kind of surprise, it could do a lot of damage to a large number of companies in the U.S. They have to invest in projects that return value that outweighs the cost of capital, but that is not happening.

Meanwhile, the private sector in the U.S. added 173,000 jobs during the month of May, which slightly beat the consensus estimate for a reading of about 158,000. As we know, however, a lot of these government statistics are adjusted, so it becomes difficult to nail down a true measure of what’s happening in the economy. Before the Internet, we had far less access to information, and now there’s almost too much of it to calculate.

That said, with job-growth figures proving to be a little stronger than expected, it may be just enough of an incentive for the Fed to raise rates at its June meeting. It may do just that, as it will then have more of a cushion to reduce them down the road if the market takes a beating again. While I’m still skeptical of a rate hike, that’s what’s being communicated to the market, so I think that the Fed may do so in the near future.

That said, we’ll play the weakening rise in crude by betting against a well-known player in the industry.

Buy Exxon (NYSE:XOM) Aug 82.5 Put options at $1.20 or lower.

InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. It’s the perfect “bridge” between investing in ordinary stocks and the turbocharged world of options trading. In Maximum Options, he brings you his personal trades using high-probability, “professional grade” strategies.

Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.