Toying with Fear

Despite the glaringly weak action in small caps and financials this morning, in effect leading the market lower after the initial ECB pop, volatility is still fairly subdued. 

True, the market may be punting on making a bonafide directional move before The Fed next week. But I suspect if the VXX, VIX ETF, clears the $23 line and holds over it, as seen on the 30-minute chart, below, it will bode poorly for equity bulls sooner than later. 

In other words, the issue if whether fear is about to see a delayed reaction to some of the selling and reversals we have on our hands today. To be sure, Goldman Sachs back below its 20-day moving average is a poor sign for such a prominent name in the market.