It’s a case of the market versus the legendary billionaire. DoubleLine Capital CEO Jeffrey Gundlach, also known as the “bond king,” just warned that a stock market crash is coming soon. In contrast, the major stock market indexes are all firmly in the green today.

Indeed, stocks have moved sharply higher since Wednesday, when the Federal Reserve opted not to raise interest rates at its most recent meeting. At the same time, the Fed’s “dot plot” still suggests one more rate hike before the year is over.

Interestingly, even though Gundlach may be the “bond king,” the bond market seems to believe that the Fed is done raising interest rates. In other words, investors are generally bullish about stocks for the coming months. For Gundlach, however, the outlook isn’t so bright and sunny.

Jeffrey Gundlach Predicts a Near-Term Stock Market Crash

So, here’s what Gundlach actually said in a recent interview. First, he warned that interest rates “are going to fall as we move into a recession in the first part of next year.”

If there is a recession, it does seem likely that the Federal Reserve would respond by cutting interest rates. There’s certainly no consensus among stock traders, however, that a recession will actually occur.

Gundlach’s bearish arguments are convincing, albeit not unique. The unemployment rate has been trending higher, and this could signal the start of an economic slowdown. Furthermore, the 10-year and 2-year Treasury yield curve has been inverted for over a year and has started to steepen.

Those aren’t new arguments, but Gundlach’s points should be duly noted. In any case, Gundlach doesn’t recommend hiding out in an all-cash position. Rather, the “bond king” prefers Treasury notes with maturities of “about two to three years” in this environment.

What Should You Do Now?

There’s no denying Gundlach’s status as a legendary investor. On the other hand, financial experts have predicted near-term stock market crashes many times before. Usually, they’re flat-out wrong or at least too early in their crash calls.

Still, it’s fine to heed Gundlach’s advice and give short-term Treasury bonds a try. Overall, however, there’s no need to drastically revise your portfolio strategy. If you’re diversified into a reasonable mix of stocks and other asset classes, you’ll probably be fine in the long run.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.