The S&P's Running Straight Into a Brick Wall (And Nobody Sees It Coming)

Don Kaufman here. 

I'm going to lay it on the line for you right here, right now...

This marketplace is dramatically underestimating some serious risks. 

We're grinding sideways with light and fluffy volume - only 859,000 contracts in the S&P futures today - and everyone's buying garbage. 

Nuclear stocks, no-name companies... it's froth, okay?

Look, from a risk-reward standpoint, this just does not look favorable. And I'm not trying to bear up on anybody here, but the math is what it is.

Here's what's got me fired up after today's session:

• Why the S&P's incredible 1,000-point rally has created a ceiling that could drop the market "like a rock" - even though there's still upside potential

• How volatility futures are already pricing July VIX above 20 - meaning the market itself is screaming that volatility has a "pretty good chance of going up"

• Why we're still "one tweet or Truth Social post away" from an all-out trade war - and the rhetoric coming out of China and the U.S. is NOT good

The upside potential? 

Maybe 20 SPY points higher. The downside risks? They could be massive, and I just don't see it priced into this marketplace.

Is this a wild game of chicken? Absolutely, unequivocally YES.

The VIX isn't even pricing off 17.50 anymore - it's already pricing itself above 20. Even volatility is saying "no look, like volatility has a pretty good chance of going up."

WATCH: See my complete breakdown here 

The downside risks are perilous right now versus that upside potential.

To your success,

Don Kaufman