NEW YORK -- As the art world braces for two weeks of contemporary, modern and impressionist auctions at Christie's and Sotheby's in New York, the yellow caution flag is already up. The great boom of the '80s is over and the players are waiting to see just how far down the market can go.

This is usually the time when the auction houses gloat about past performances and the high probability of new records and additions of mega-million-dollar pictures. But this year the volume has been turned down to a gloomy whisper.

Consider the rosy outlook of a Sotheby's news release last December announcing its 1989 world-wide auction sales of $2.9 billion, a 61 percent increase over the '88 figure. Its autumn sales alone last year were up 72 percent over the previous year to $1.5 billion. "We enter the decade of the '90s with a great degree of optimism," said Michael L. Ainslie, president and CEO of Sotheby's Holdings.

But the glossy catalogues this November are thinner, with fewer lots offered. In many cases they reflect lower pre-sale estimates for works of the world's most famous and heavily hyped artists, both living and dead, than the sales of last season.

"I've based my estimates as far as possible on prices realized in '88 for impressionist painting, " said David J. Nash, Sotheby's director of fine art. Even the published estimates -- hammered out months ago between the consignors and the auction houses "when things were not looking as bleak as they do now" -- are being revised downward in conversations with potential buyers, according to Nash, to more accurately reflect the receding shape of the market.

"It used to be a client would call and ask how much over the high estimate he'd have to go to get the picture," explained Nash, hypothetically inserting a $1 million to $1.5 million estimate for the imaginary picture. "Now the question is, 'Can I get it for under a million dollars?' "

Lower estimates also require consignors to lower their reserves, the lowest price they will accept for each work of art. The reserve is a confidential figure, usually a bit under the published low estimate. High reserves in this nervous market easily translate into works being "bought in" -- that is, they remain unsold. The higher the buy-in or failure rate, the more skittish the results. In the boom years, greedier reserves were usually satisfied.

But in a major shift from recent predictions on performance, both houses are pushing the prospects of 30 percent buy-in rates. "I'll consider it a success if we keep it under that level," said Nash. Just last May, for example, Sotheby's realized a 5 percent buy-in rate for its impressionist evening sale.

The mood of lowered expectations is no different at Christie's, which lost out to Sotheby's in snaring the highly coveted cache of impressionist and modern artworks from Henry Ford II, estimated to bring between $66 million and $85 million on Nov. 12.

Sotheby's had to guarantee a minimum price for the Ford bounty, a controversial practice that both houses exercise in their high-stakes bidding wars for property. The gurarantee means that Sotheby's has to pay a confidential minimum to the estate whether or not the Fords sell. Usually, the guarantee is set at a substantial fraction of the low estimate. The Ford name carries considerable cachet in the category of world-class collectors.

While he was still alive, Henry Ford II sold 10 of his most prized pictures, including a fabulous van Gogh at Christies in 1980. "The Poet's Garden, Arles" sold for a record-shattering $5.72 million. That sale was the first glimmer of the '80s art boom.

But even the most expensive offering in that consignment, Renoir's "La Tasse de Chocolat," that Edsel Ford purchased in Paris from Renoir's dealer in 1937, is pegged at $15 million to $18 million, nowhere near the astronomical turf of $78.1 million realized for Renoir's "At the Moulin de la Galette" sold at Sotheby's last May.

Christie's highest estimated lot is Vincent van Gogh's "Vase With Cornflowers and Poppies," painted in 1890 and estimated at $12 million to $16 million, a far cry from the $82.5 million paid for his remarkable "Portrait of Dr. Gachet," which sold at Christie's last May.

"We know impressionist sales will be down this year. Instead of getting $250 million or whatever it was last year, we'll probably see $140 million," said Christopher Burge, president and CEO of Christie's New York. "We haven't got any $30, $40 or $50 million pictures. We're selling 47 lots in the evening sale as against 70-odd in last November's. Obviously, people are a little nervous about the situation and will tend toward caution, it can't be helped. If you had a $40 million picture which you didn't have to sell, would you put it up for sale now?"

While both Nash and Burge see this "adjustment" in the contemporary and impressionist/modern fields as a natural and cyclical process, a kind of seven-year boom before the bust, others with shorter memories panic at the thought that the party is over.

"What I'm anxious to avoid," says Nash, "is a self-fulfilling prophecy, which can so easily happen in this business where confidence in the stability of the market is of great importance. If one lays it on too thick about the fears of the market it causes people to be fearful."

"I'm shaking in my boots," said veteran Madison Avenue modern master dealer Klaus G. Perls. "The climate is not propitious for good results."

Last May at Sotheby's, Perls purchased Amedeo Modigliani's 1918 portrait, "Boy in a Blue Jacket," auctioned for the Solomon R. Guggenheim Museum here in New York, for $11.5 million. The price soared past the high estimate of $8 million. "All I can tell you is that today I wouldn't pay what I paid then," said Perls. "I would not recommend it to anybody at that price, although obviously -- if I sell it now -- I'd have to get more. But I haven't got a chance."

The Modigliani is currently on view at his gallery and carries a price tag of $15 million. But at age 78, Perls says, "It's a very nice picture to die with."

As private dealer Richard L. Feigen says, "Given the economic climate, everyone is awaiting the auctions to get information about what effect all this is having. There's plenty of money around, but I feel many people are turning away -- especially in the contemporary market -- from this sort of incestuous roundelay of ballooning prices of a very small circle of artists. Part of it is simple financial caution. They're not convinced anymore that the speculative cycle will continue. We're going to see some carnage in that arena."

It is Feigen's hunch that the smart collectors will be "bottom fishing" for bargains in the sales, in expectation of lowered estimates. "The people who are liquid will buy. The bug is there. They won't be cured by economic conditions."

The contemporary market is particularly vulnerable to a dive since it has historically been championed by American collectors. Only in the past few seasons have significant numbers of European and Japanese buyers entered that field. But its international profile -- with the obvious advantage of using stronger currencies such as the Japanese yen and the German deutsche mark against the weakening U.S. dollar -- is substantially slimmer than the impressionist/modern market. Postwar art, from de Kooning to Warhol, poses the greatest risk for a significant downturn.

"Everybody's in a wait-and-see mood," said mega-contemporary collector Elaine Dannheisser. "Nobody wants to be a sucker, sitting there holding the bag. People want to see how far down the market is going before they start buying. I'm going to wait and see. If there is going to be a major correction, why should I want to buy at the high end?"

Dannheisser just returned from FIAC, a major contemporary art fair in Paris. "People weren't buying at the fair because they were waiting for the auctions. They've become a barometer."

Last year Dannheisser traded her Jean-Michel Basquiat painting, "Humidity," for one by the minimalist Robert Ryman. Each was valued at $250,000. One month later at FIAC, according to the collector, the Basquiat sold for $500,000. "That was crazy," said Dannheisser. "The whole world was buying art then."