Last week I told you risk for the markets was off the charts. Last week Google (GOOGL) is down 1.5%, FB down marginally, Amazon (AMZN) down 2%, AAPL up marginally and Netflix (NFLX) down 5%. Biotech is down 2.9% as is housing. These are not big numbers, but when you look at some of these charts we are starting to see technical damage for the first time in a long time.

We talked about not so obvious black swans. Can we really call North Korea a black swan? After all, this is a situation that has been bubbling below the surface for years. I suppose the fact that nobody believes a major war can break out even now as you read this speaks to the surprise nature even as we look down the barrel at it. Serious participants also realize the market is allergic to wars and isn’t going to like it at all if something does materialize this week. You don’t need me to tell you the North Korean dictator has threatened Guam by the middle of the month so everyone is watching to see how the situation resolves.

For those of you who don’t know, Dr. Steve Pieczenik is the real-life Jack Ryan from the Tom Clancy novels and has an excellent track record of being right. He stated last week this crisis is not about North Korea at all but is focused on China. For those who haven’t been following it, China has been in a dispute with India over territory near Bhutan in the Himalayas. India massed troops along the border while China has been war gaming in the vicinity.

What they are not talking about in the media is our military complex has had enough. Trump was fully vetted by the generals to blast Kim Jong Un, but the real target was President Xi Jinping, who understands what is really going on and got the message. It could explain why the market had a measure of relief on Monday morning. But it still doesn’t get us out of the woods in case the North Korean strongman decides to save face. However, to look at the behavior of the markets, they are treating it the same way they’ve treated every geopolitical crisis from the 20th century. In other words, the crowd is deeply concerned.

But here’s what I am concerned about. The situation in Charlottesville is like Ferguson as far as our market work is concerned. The national consumer watching on their television or devices tend to shut their wallets at the first sign of social unrest. I wish I could tell you this would be the end of it for a while, but I fear something could happen again next weekend. This time peaceful protests are planned at Google offices next Saturday in five cities (NY, Boston, Austin, DC and Mountain View) across the country. It would be one thing if these events remained peaceful but how many realize 90% of the troublemakers on Saturday came from out of state? At this stage of the game, it would naïve to think these legal protests will go on without some type of trouble.

Over time, I’ve also brought to your attention this is a hybrid market that has elements of the 1930s but also the 1960s. The 30s brought the end of the Great Depression and a five-year bull which was interrupted by trouble which ultimately brought war to Europe. The 60s bull was interrupted by all the war protests and social unrest as a byproduct. Here, one day they are talking nuclear war and the next our country is being torn apart from within. Is the perfect storm brewing?

The VIX is now up 94% off its sleepwalking bottom which doesn’t mean much if it really wants to accelerate. If there is anything good coming out of this is people are waking up. The problem for this generation of traders is most of us grew up in this business in relative peacetime except for one event. The market was destroyed in the days after September 11. But for the most part all we’ve had to worry about are earnings reports and Fed statements. But the crowd had to deal with all kinds of disruption and social unrest in earlier eras. How many realize the NYSE was closed from the end of July until mid-December in 1914 at the start of WWI?

As far as Europe is concerned, the euro/U.S. dollar (EUR/USD) currency pair made a fresh attempt to go higher and consequently the CAC held the trendline and broke below gap support, but by early trade both had backed off the new direction. That gap just so happened to be the place where Macron pulled ahead and ultimately defeated Le Pen. With his own approval rating at just 36%, the French people could already be getting a case of buyer’s remorse.