When Markets Don't Trust Themselves

(The Vol Signal Everyone's Missing)

Author

Don Kaufman
September 29, 2025

Don Kaufman here.

I woke up this morning and the S&Ps were up 40 points. 

By the time I hopped on my live trading room session, they were already cut that in half. But here's what's got me perplexed - and this is the signal everyone's missing.

The Market That Doesn't Trust Itself

When you're watching the S&Ps, trade on low volume in the pre-market, it tells you something. Lower contract size means there's just not a lot of capital confirming what you're seeing on the screen right now.

But here's the kicker - and I'm dead serious about this: trust nothing you've seen in the pre-market.Let me paint the picture: Wednesday, Thursday, and Friday of last week were some of the quietest trading sessions I've seen. 

If the market's heartbeat was this flat, you'd be dead. One sign of life on Wednesday around the Fed announcement, then back to meandering like a drunk in the woods.

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⚡ Levels & Triggers

This is where we get tactical.

  • Home Depot (HD): Sitting at $407 – “right on the dance floor.” The probability of a touch this week is ~54%. This level matters. A break lower could trigger acceleration.

  • Bank of America (BAC): Put spreads expiring in 4 days – needs downside follow-through immediately.

  • Energy (XLE): Short spreads already paying, hitting the lower edge of expected move.

Tesla (TSLA): Implied vol is at 71% this week, pricing in a $30 expected move, like it has earnings. Options skew is unusual – calls are being bid while puts are softer. Something is brewing.

🗓 Catalyst Calendar

  • Sept 30: EV tax credit expires – drove massive Q3 Tesla orders, but Q4 demand cliff ahead.

  • Oct 1: Potential government shutdown, jobs report uncertain.