Here is a chart of the CBOE Put/Call Ratio that can only be viewed in this size to see all the details necessary to put the current position in perspective. The 10-day moving average still has a little bit to go before it’s in the “fear zone” where the amount of puts.
The VIX also hasn’t hit the “blood in the streets” level indicated by the blue lines. My timing signal indicators this week nearly match those from the Flash Crash in May 10′ so I expect the VIX to reach the 45 level at a minimum before this is all said and done. Obviously that is not that much of a stretch when you factor in the news regarding the AAA credit status.
Nobody has any idea what is going to happen on Monday and that is why it’s going to pay to be in cash and watch from a detached position vs a defensive position of being trapped in positions over the weekend.
