This is one way the market sniffs out tail risk. The VIX was at 15.77 a little while ago while the VVIX, which measures the volatility inside the Vix, was at 88.9. A ratio of 88.9/15.77=5.6 ratio, that's elevated no doubt. That tells us that the cost of crash protection is high(VIX spike) So, while regular volatility is cheap, hedges against the Vix spike are expensive. We all see what's happening in the bonds market. Its the right time for election volatility to  start. Oct. 2nd saw the highest credit spreads,.312, since obliteration day. Now, I see Crypto is getting pounded. The first things to look for, that might precede a spike is HYG breaking down below $76.39, and the 10 year rising over 5.36. That doesn't mean it will happen but odds start increasing it will.

 I looked at the 22-spikes last year, VIX pricing is the close to the same, but bonds and credit are weaker. The good news 9is we will only see a spike in the VIX to upper 20s maybe 30. The bad news; my Fearless Forecast has been really close so far, it calls for a drop for two weeks, then a bounce in to the election, then down800-1000 point until the end of the year and aVIX spike to the upper 50s. Looking around everybody still expects the "Grind" in to year end to be favorable. The traditional big rally. Most people don't capitalize on shorts, so it wouldn't bother me if I am wrong. I'll play it either.way. I expect the Hyper scaler earnings to cause volatility, the quality isn't there. They have gotten a pass so far and are worse than Joe 6 pack suspects. Time to get honest? I have a lot to say about this and will try and find time to post (JMHO)

Oil may get down to the 75 dollar level by early November. Long term Martin Armstrong's AI says over 200 dollar oil is coming, he expects war to escalate in 1st quarter 2027 and keep going into 2028, Europe will lose the war, go bankrupt and breakup in 2029. The USA will also break up into 3 countries by 2034 after his major pi cycle date of 2032.95.  China will become the financial center of the world and largest economy after 2032. Western Canada will break away from Eastern Canada with the largest deposit of recoverable oil in the world.                                                                                                      Alberta possesses the largest total oil endowment on Earth — more than Saudi Arabia or Venezuela. As emerging extraction technologies mature over the coming decade, a far greater portion of Alberta’s resource will become recoverable, ultimately surpassing Saudi Arabia’s recoverable reserves.
Current estimates place Alberta’s total oil‑in‑place at 1.8–2.2 trillion barrels. With advanced extraction methods such as solvent‑only recovery, electromagnetic heating, and in‑situ upgrading, Alberta’s future recoverable reserves could reach 300–900 billion barrels — making Alberta the world’s largest source of commercially extractable oil.
This represents tens of trillions of dollars in long‑term economic value, especially if global oil prices rise as projected by analysts such as Martin Armstrong. Alberta’s resource wealth is so large that its future political autonomy will inevitably become a central national issue.

#2 Saudi Arabia 170–200B barrels

#3 Venezuela 75–120B barrels.                                                                                                                                                                                                                                                                                                                                          

The QQQ/$NDX/$COMPQ continue to make new ATH's, while the $SPX is less than 1% away. It's only a matter of time before the Dow catches up to all the fun happening in these nosebleed seats. We're going higher, much higher. 

Remember, all dips are buying opportunities. While 2-3% pullbacks aren't out of the question, the trend is up and remains up until proven otherwise. Therefore, a meaningful top is not going to happen until there simply aren't anymore bears left to fight the trend. I don't see that happening until the markets are at least 20-30% higher from current levels. 

Watch the sky!   

According to my turn probability summation system, the days this coming week with the highest odds of seeing a turn in or an acceleration of the current trend in the DJIA are Monday October 5th which may just be a continuation of this past week's Thursday-Friday turn window and Wednesday October 7th.  

Last week the Thursday October 1st thru Friday the 2nd turn window shown in red on the marketwatch.com plot excerpt below caught a low the importance of which will be determined by action early this coming week.  This turn up might be quite short lived if Monday's turn window is not part of the late past week window.

As I noted in last week's turn window post, this coming week is the next crash risk window peaking right in the mid-week turn window noted above.  As I have countless times pointed out, the odds of these actually tagging a crash are extremely low.  There are several of these crash risk windows each year and despite (or probably because of) my diligence in pointing them out, not a single one has tagged a crash since I have started noting them.  So much for my prognostication skills, even a broken clock is right twice a day.  

If a sell off in the DJIA actually does ever occur in the coming months, it will probably be the last gasp of a bear market that has lasted 26 years.  What bear market you say, the one in the real DJIA shown below.  The DJIA divided by gold peaked in 2000 and has been in a down trend ever since.  This real DJIA appears to be on the cusp of completing three large waves down.  Can't say if that will be due to the DJIA rising or gold falling or a bit of both.  Sometime between now and the end of 2027, a real barn burner of a bull market in the real DJIA should get rolling.

For the crash window to work requires a black swan.  In 1987 the then Treasury secretary James Baker trash talking a rapidly falling dollar was pointed to as the black swan causing the stock market crash.  This past week our illustrious leader trash talked US Treasuries noting that inflation could be easily used to pay off the massive 40 trillion deficit (see Fortune Magazine article published on October the 2nd).  It is not clear if sovereigns holding Treasuries got the memo yet or read Fortune Magazine, but enough inflation to wipe out the US deficit would make those countries treasury holdings pretty much worthless.  A stampede out of treasuries would be just the black swan needed to light off a crash.  The POTUS may get away with his treasury trash talking since he does so much of it that hardly anyone notices anymore, but if the wrong ones do take note, Katy better bar the door.

Regards,

Douglas

for example....da cheif ?  And many others as well ? Please get back, we need eveybody's contribute.