Markets · closes to Oct 13, 2026
2 of 9 gauges flash a warning, 3 say watch and 4 are calm. Warnings: valuation and long rates. Calm: trend, volatility, credit stress and jobs. The trend is still up, and the trend is what has historically confirmed that a fall has actually begun.
Nine gauges that mattered before past crashes. None times a crash on its own: markets can stay expensive for years. They describe how stretched and how fragile things are. Read: is this a bubble?
The same 100 plays that run on every stock, run on the indexes. Open one for its chart, every call and the names most exposed to a crash.
| Market | Level | Day | 1 year | vs 200-day | Plays in | 2-yr run-up | Crash exposure |
|---|---|---|---|---|---|---|---|
| S&P 500S&P 500 index | 7,805.45 | 0.0% | +17% | +8% | 63 of 100 in | +34% | Low |
| Nasdaq-100Nasdaq-100 index | 30,570 | −0.3% | +24% | +10% | 66 of 100 in | +51% | Low |
| DowDow Jones Industrial Average | 51,670 | −0.3% | +12% | +3% | 44 of 100 in | +21% | Low |
| Russell 2000Russell 2000 index | 2,783.37 | −0.4% | +13% | 0% | 29 of 100 in | +25% | Low |
| TSXS&P/TSX Composite index | 35,984 | +0.9% | +21% | +5% | 47 of 100 in | +47% | Low |
U.S. sector funds. A two-year run-up of 100% or more is the bubble line in Greenwood, Shleifer & You's research.
| Market | Level | Day | 1 year | vs 200-day | Plays in | 2-yr run-up | Crash exposure |
|---|---|---|---|---|---|---|---|
| SMHSemiconductors | $588.12 | −0.5% | +74% | +16% | 52 of 100 in | +131% | Moderate |
| XLKTechnology | $196.28 | 0.0% | +38% | +18% | 62 of 100 in | +72% | Low |
| XLEEnergy | $67.20 | +1.8% | +60% | +19% | 74 of 100 in | +54% | Low |
| XLCCommunication services | $112.28 | +0.7% | 0% | −1% | 35 of 100 in | +27% | Low |
| XLIIndustrials | $168.67 | −0.3% | +13% | −2% | 30 of 100 in | +25% | Low |
| XLFFinancials | $54.82 | −0.4% | +6% | +3% | 42 of 100 in | +21% | Low |
| XLYConsumer discretionary | $112.36 | +0.1% | −3% | −3% | 40 of 100 in | +16% | Moderate |
| XLVHealth care | $169.66 | −1.4% | +22% | +9% | 55 of 100 in | +14% | Low |
| XLUUtilities | $41.87 | +0.6% | −5% | −4% | 43 of 100 in | +12% | Low |
| XLPConsumer staples | $84.19 | −0.3% | +11% | +2% | 56 of 100 in | +9% | Low |
| XLBMaterials | $49.72 | +0.6% | +15% | −1% | 35 of 100 in | +8% | Low |
| XLREReal estate | $41.83 | −0.2% | +6% | −2% | 39 of 100 in | +3% | Low |
Monthly history with U.S. recessions shaded and the last four market tops marked. Tap a chart to read any month.
Is the market's own trend still up?
The S&P 500 is 7.5% above its 200-day average, and 63 of 100 plays hold it (66 of 100 on the Nasdaq-100).
Every major bear market started with prices breaking below their long averages. Trend is a late signal, but it is the one that tells you the fall has actually begun.
Sources: Meb Faber, A Quantitative Approach to Tactical Asset Allocation (2007)
How expensive are stocks against ten years of earnings?
The S&P 500's cyclically adjusted P/E is 41.8, higher than 99% of months since 1871. Only the 1999–2000 dot-com peak (44.2) was higher; the long-run average is about 17.
High valuations have been followed by low returns over the next ten years. They say little about next month: CAPE was 'high' through most of the late 1990s while prices doubled.
Sources: Campbell & Shiller, Valuation Ratios and the Long-Run Stock Market Outlook (NBER, 2001) · Shiller CAPE by month (multpl.com)
Has the market risen so far, so fast, that history says to be careful?
The Nasdaq-100 is up 51% over two years. In Greenwood, Shleifer & You's study, U.S. industries up 100% or more in two years crashed by 40% or more within the next two years about half the time; at 50% the rate was about one in five.
Big run-ups don't predict low average returns, but they do raise the odds of a crash, especially when volatility is rising, new shares are flooding in and the rise is accelerating. Even then, prices kept rising for about six months on average before the peak.
Sources: Greenwood, Shleifer & You, Bubbles for Fama (Journal of Financial Economics, 2019; NBER w23191)
Is the rally carried by a few giants or by most stocks?
Over three years the average S&P 500 stock (the equal-weight index) has lagged the cap-weighted index by 15%; over the last year it has lagged it by 2%. The top 10 stocks were 37.9% of the S&P 500 in June 2026, against about 27% at the 2000 peak.
A market leaning on a handful of companies is less diversified than it looks: if the leaders stumble, the index has little underneath it. Concentration is a fragility measure, not a tested crash signal.
Sources: RBC Wealth Management, The great narrowing (Jan 2026) · S&P 500 concentration (chartrow, June 2026 filing)
Is fear high now, or has calm lasted suspiciously long?
The VIX is 15.3. Over the past year it spent 11% of days below 15.
The VIX mostly spikes during a crash rather than before it (82.7 in March 2020, 80.9 in November 2008). The research warning is about long stretches of very low volatility, which tend to encourage borrowing and risk-taking.
Do bond markets expect a recession?
The 10-year Treasury yields +0.95 percentage points over the 3-month bill. It was last inverted in October 2025.
An inverted curve (short rates above long rates) came before every U.S. recession since 1969, typically by 5 to 16 months. The 2022–24 inversion, the longest on record, has not been followed by a recession so far. It is a recession signal, not a crash timer.
Sources: Estrella & Mishkin, The Yield Curve as a Predictor of U.S. Recessions (NY Fed, 1996) · FRED: 10-Year minus 3-Month Treasury (T10Y3M)
Are lenders demanding more to lend to companies?
Baa-rated companies pay 1.45 percentage points over 10-year Treasuries (-0.11 in three months), tighter than 98% of days since 1990.
Widening credit spreads have led declines in economic activity and stock prices (Gilchrist & Zakrajšek, 2012). But spreads are often tightest just before trouble, as in early 2007, so a calm reading is not an all-clear.
Sources: Gilchrist & Zakrajšek, Credit Spreads and Business Cycle Fluctuations (American Economic Review, 2012) · FRED: Moody's Baa minus 10-Year Treasury (BAA10Y)
Is unemployment rising fast enough to signal a recession?
The Sahm rule reads +0.00 (it triggers at +0.50). Unemployment was 4.2% in September 2026.
Claudia Sahm's rule (2019) has triggered early in every U.S. recession since 1960. It fired in August 2024 without a recession, when immigration was swelling the labour force.
Sources: Congressional Research Service on the Sahm rule · FRED: Unemployment rate (UNRATE)
Are rising bond yields squeezing what stocks are worth?
The 10-year Treasury yields 5.22% (+1.17 points in a year), the highest since 2007.
Higher long-term rates make future profits worth less today and give investors a safer alternative to stocks. Rising rates have punctured many bubbles, from Japan in 1989–90 to the 2000 and 2022 tops.
Sources: FRED: 10-Year Treasury yield
Each gauge's reading on the day the S&P 500 peaked before the dot-com bust, the financial crisis, COVID and 2022, coloured by the same thresholds used today.
| Gauge | 2000 top | 2007 top | 2020 top | 2022 top | Now |
|---|---|---|---|---|---|
| Trend | +11% | +6% | +11% | +9% | +8% |
| Valuation (CAPE) | 43.2 | 27.3 | 30.7 | 36.9 | 41.8 |
| Run-up | +292% | +40% | +44% | +88% | +51% |
| Concentration | – | +3% | −10% | −7% | −15% |
| Volatility (VIX) | 23.3 | 16.1 | 14.4 | 16.6 | 15.3 |
| Yield curve | +0.29 | +0.61 | −0.02 | +1.55 | +0.95 |
| Credit stress | +2.13 | +1.90 | +2.05 | +1.82 | +1.45 |
| Jobs (Sahm rule) | +0.00 | +0.23 | +0.00 | −0.17 | +0.00 |
| Long rates | 6.17% | 4.65% | 1.57% | 1.63% | 5.22% |
| Warnings lit | 3 | 0 | 1 | 1 | 2 |
No two tops looked alike. 2000 was about valuation; 2007 about credit; 2020 was a shock nothing on this list could see; 2022 was rates. The point is not to match a pattern but to see which kinds of fragility are present now.
The covered stocks with the highest crash exposure: how hard they swing with the market, how they fared in past crashes, their debt and their run-up. This is the storm test: shocks hurt most where debt is heavy.
| Stock | Exposure | Beta | 2-yr change | Plays in | Why |
|---|---|---|---|---|---|
| RKLBRocket Lab | Very high 10/10 | 2.51 | +562% | 26 of 100 in | moves about 2.5× its index; fell about 2.7× as far as its index in past crashes |
| USAAmericas Gold and Silver | Very high 10/10 | 2.85 | +317% | 23 of 100 in | moves about 2.9× its index; fell about 2.2× as far as its index in past crashes |
| ASMAvino Silver & Gold Mines | Very high 9/10 | 3.18 | +339% | 23 of 100 in | moves about 3.2× its index; fell about 2.0× as far as its index in past crashes |
| BBD.BBombardier | Very high 9/10 | 1.92 | +172% | 30 of 100 in | moves about 1.9× its index; fell about 2.4× as far as its index in past crashes |
| MAUMontage Gold | Very high 9/10 | 2.26 | +739% | 32 of 100 in | moves about 2.3× its index; fell about 1.8× as far as its index in past crashes |
| OPTTOcean Power Technologies | Very high 9/10 | 16.32 | +380% | 30 of 100 in | moves about 16.3× its index; fell about 1.8× as far as its index in past crashes |
| SKESkeena Resources | Very high 9/10 | 2.49 | +268% | 58 of 100 in | moves about 2.5× its index; fell about 2.4× as far as its index in past crashes |
| TKOTaseko Mines | Very high 9/10 | 2.60 | +249% | 50 of 100 in | moves about 2.6× its index; fell about 2.3× as far as its index in past crashes |
| TSATTelesat | Very high 9/10 | 1.76 | +243% | 35 of 100 in | moves about 1.8× its index; fell about 5.1× as far as its index in past crashes |
| ABRAAbraSilver Resource | Very high 8/10 | 3.29 | +306% | 27 of 99 in | moves about 3.3× its index; operating profit doesn't cover its interest |
| BNBrookfield Corporation | Very high 8/10 | 1.70 | +7% | 28 of 100 in | moves about 1.7× its index; fell about 1.5× as far as its index in past crashes |
| CARAvis Budget | Very high 8/10 | 1.85 | +30% | 22 of 100 in | moves about 1.8× its index; fell about 1.8× as far as its index in past crashes |
| CRWDCrowdStrike | Very high 8/10 | 1.90 | +226% | 62 of 100 in | moves about 1.9× its index; fell about 1.3× as far as its index in past crashes |
| CURACuraleaf | Very high 8/10 | 1.93 | +2% | 28 of 100 in | moves about 1.9× its index; fell about 3.1× as far as its index in past crashes |
| DMLDenison Mines | Very high 8/10 | 2.22 | +26% | 18 of 100 in | moves about 2.2× its index; fell about 1.7× as far as its index in past crashes |
Every stock page has its full crash card. Index pages list every covered name on that market. How the storm test works
What different choices would have done through real crashes. Pick a period, a mix and a plan. The right mix depends on when you need the money. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.
Monthly total returns: SPY for stocks, TLT for long Treasury bonds, GLD for gold, 13-week T-bills for cash. No taxes or fees. "Rebalance yearly" resets the mix every 12 months. The 10-month rule is Meb Faber's play, checked at each month-end. Past paths, not a forecast.
Bucket 1 · cash
What you'll spend in the next year or two
Held in savings or T-bills, so a crash never forces you to sell stocks at the bottom to pay the bills.
Bucket 2 · bonds
Money for years three to seven
Steadier than stocks and usually earning more than cash. Refills bucket 1 when stocks are down.
Bucket 3 · stocks
Money you won't touch for years
Left to ride out crashes, which have historically recovered given time. Trimmed into the other buckets after good years.
The bucket approach is a planning habit popularised by financial planner Harold Evensky. It doesn't make crashes smaller; it makes them survivable, because nothing you need soon is in stocks.
Selling to wait out a storm means guessing twice: when to leave and when to come back.
$10,000 in the S&P 500 (SPY), Jan 2005 to Oct 2026
Of the 20 best days, 14 came while the market was in a bear market (20% or more below its high), and 14 came within two weeks of one of the 20 worst days. The days you would most want to miss and the days you can least afford to miss arrive together.
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