Larry McDonald saw a financial panic from the inside while working on the high-yield bond desk at Lehman Brothers when the financial firm filed for bankruptcy seven years ago this week.
He even wrote a book about it.
Now the head of U.S. strategy for the macro group at Societe Generale, McDonald shares with CNBC Pro where he believes the next financial crisis is brewing right now.
(Watch quick video below:)
So at what point should you actually start to sell stocks in anticipation of this crisis?
The strategist reveals a great indicator that the retail investor can follow along with at home.
(Watch quick video below:)
The chart used in the video of the iShares High Yield Corporate Bond ETF versus the S&P 500 is pictured here.
iShares High Yield Corporate Bond ETF vs. the S&P 500, YTD
The "HYG Indicator" as a sell signal was pointed out by a newsletter McDonald founded, The Bear Traps Report, in July before stocks began to crater.
Going forward, the divergence between the ETF and the S&P 500 could be your tell again if stocks have another leg down, according to the strategist.
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