Market Thought... removing complacency

Ever since the vix was near multi-year lows, I have been caustious on the market. The lack of appreciation to the geopolitical uncertainties was very evident.  The middle east being systematically dismantled. Ukraine and Russia, with Russia kicking the G7 in the nuts and wondering why the world is  isolating them. Israel and Gaza fighting a war on children. And the market-mechanical issue of a country default (w/ ~110b in external debt), the domino effect that are hard to ignore.

With the default as a catalyst, the negatives are at the forefront. The Vix was not a discounter of the above fears, seems like the treasury was playing that role.

Now the vix is testing the high-end of its current trading dynamic limit.

Depending on how much negative chatter is generated, the SP500 can see 1880-1890. (Effectively wiping away the market premium, and have a trailing PE closer to the normal 17 range.)

The current geopolitical events are easy to escalate, and the uncertainty can easily drive the markets lower. But the complacency that existed a few days ago is no more.