(FORTUNE Magazine) – Investors with any knowledge of the past might well be sweating by now. October, historically the most volatile month of the year, is also the month when the market has taken its most spectacular crashes: most notoriously in 1929, and again in 1987. Friday, October 13, in 1989 saw the market drop a frightening 6%. In 1990, extreme volatility was October's pattern. The market ended the month just shy of where it had started, but investors were noticeably shaken. With this backdrop--and today's soaring Dow--you might think that the knocking knees of nervous investors would be the predominant din on Wall Street. Instead, what you still hear is the thunder of galloping hooves. Listen more closely, though, and you can pick up sounds of caution that indicate some bulls may be beginning to falter:

Barton Biggs, chief global-markets strategist at Morgan Stanley, warns, "Never before has there been a bull market with such broad participation. This is not a good sign. God forbid what happens when the chickens come home to roost."

Says Richard T. McCabe, Merrill Lynch's chief market analyst: "The market has been overbought for some time now. We think it's wise to expect a drop, maybe one of 5% to 10%." Even a 5% fall would represent a gigantic tumble of about 240 points from the Dow's current level.

Eric Sorensen, head of quantitative research at Salomon Brothers, says, "I think the market will be much more volatile in October than we have seen for a while." Sorensen adds, "I'm seeing more institutional investors heavily hedging their portfolios through futures and options."

And Salomon's longtime Cassandra, chief equity strategist David Shulman, continues to push his dire predictions that the bull is about to come to a crashing halt. He is also increasingly concerned about excessive confidence among investors, who seem to believe that the bull will run forever. "There's no worry in the market," he frets. "And that just means market psychology can only go down from here." It is easy to ridicule Shulman, who himself admits to missing the entire 1995 run-up in the market. But don't forget he has been right before. He predicted the crash of commercial real estate in the late 1980s and last year's stock rally.

Most of Wall Street, of course, remains unswervingly bullish. That includes Elaine Garzarelli, who as a Lehman Bros. equity analyst was among the first to call the 1987 crash. Now running her own firm, she says, "Our indicators are signaling a buy on the market." Adds Biggs's colleague Byron Wien, Morgan Stanley's chief equity strategist: "I expect the Dow to reach 5000 before year-end." More reserved but still confident is Abby J. Cohen, who co-chairs the investment policy committee at Goldman Sachs. She says, "We are still very bullish. Profit margins are at record levels, and there is still demand for equities. I think the market is still inexpensive." Even so, Cohen concedes that stocks are no longer what she calls "screaming bargains." Perhaps more significant, she has cut back her recommended exposure to equities from 75% to 60%. Even Garzarelli suggests a move into more defensive areas like foods and drugs.

All but the most blinkered bulls, however, are cautiously eyeing a handful of disparate indicators that in any combination could spell disaster. Among them:

Third-quarter earnings. The record profits of the first six months of the year are clearly beginning to give way to a more uneven performance in the second half. IBM and Caterpillar, among others, have warned of earnings troubles ahead. Cohen forecasts that corporate profits will grow at an annual rate of about 10% for the rest of the year, vs. 20% through June. Perhaps more important, investors won't enjoy the huge earnings surprises of earlier in the year that drove up the Dow.

A slowing economy. This could prove a double-edged sword. "There is a basic tug of war going on," Cohen says. "Slower economic growth is good for stocks because it means less inflation. On the other hand, it will mean slower growth in corporate earnings."

The dollar. Any strengthening will hurt companies with big foreign sales.

The shift in the stock groups that lead the market. For much of the year, of course, technology has led the way, with many of the stocks rising to dizzying (if not downright daft) heights. Semiconductor shares in particular were almost too hot to handle for a spell before dropping suddenly in July. They rebounded soon thereafter, only to flop again in mid-September. More defensive groups, including food, beverage, and drug companies, have started to take the lead. To Merrill Lynch's McCabe, this "is often a sign that the market is in a late phase of a rally."

Worrisome multiples. These include the multiple of stock prices to reported book value (3.5 today, vs. 1.9 in 1990) or price to replacement book value (currently its highest in 30 years). As bad: dividend yields (2.39% for the S&P, a record low, and 2.4% for the Dow). Corporate payout ratios, the percent of net profits paid out to shareholders, are also now at record lows.

And let's not forget inflation. If it awakens, interest rates will climb, and the market will take a beating.

While none of this means you should necessarily jump out of equities, it does suggest that you should consider repositioning your portfolio. This means reducing exposure to companies doing business overseas, and maybe taking Cohen's advice and pruning your overall equity position. You will strengthen your defense against a market drop by moving into consumer-driven industries like food (Sara Lee, perhaps), drinks (Coca-Cola or, perhaps better, Coca-Cola Enterprises, its bottler), and drugs (Merck or Bristol-Myers Squibb). (For other bargain stocks in today's market, see "Cheap Stocks: Are They Trash or Are They Treasure?")

Sure, the warnings are all big ifs, with no special deadlines. Or is time running out faster than you might like to think? McCabe points to two indicators that suggest just that: (1) the market's momentum as measured by the volume of shares traded, and (2) the rate of stock price gains. Both peaked in July. McCabe says such peaks usually happen three to six months before indexes like the Dow top out and fall.

Let's see. That could mean that if the Dow is true to history, the market could drop as soon as...October.