Morgan Stanley is out with a scary forecast for August, warning of the biggest stock-market drop since supposed inflation fears caused shares to plummet in February. This time, the thinking goes, market participants have simply run out of good news to look forward to. For one, there’s a strong chance corporate earnings have peaked. Still worse is that FAANG leadership has failed with the recent plunge in Netflix and Facebook following mildly disappointing Q2 reports. Even AMZN, whose numbers did not disappoint, was unable to hold onto gains racked up seconds after the good news hit the tape.

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If there is reason for optimism, it comes from the old stock-market adage, ‘They don’t ring a bell at the top’. For make no mistake, that is exactly what Morgan Stanley would be doing if stocks are about to cascade. A contrarian would look for some scenario to make the geniuses at Morgan look foolish, since, if they are right, it would mean all of us are about to make easy bucks in the weeks ahead with put options that explode to ten times their purchase price. Nearly everyone I talk to is at least as bearish as the analysts at Morgan. Is it possible we’re all about to nail the top?  In any event, it would be a relief to see the broad averages head-fake one last time before diving into the bowels of hell. How else are we going to be caught with our pants down, which is how every bear market begins?  A possibility springs to mind: Monday’s moderate weakness turns into an avalanche this very evening or early Tuesday. That would work. Show of hands: How many of you bought a bushel basket of put options ahead of the closing bell?