THIS is what panic looks like…..

Posted on 08/05/2011

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soon the baby will go out with the bathwater……or the Fed will announce another effort to put a band aid on a hemorrhaging wound…..which may or may not work.

To provide a little perspective, in late 2008, the VIX got to 90. I do NOT believe we’ll revisit those levels, but vol moved from 18 to nearly 40 in short order.

Market (S&P) sells off from ~1350 to ~1175 or 175 points (13%).

Volatility (as measured by VIX) moves from 15 1/2 to 39 1/2 (or +155%).

The VIX (cash) got very near 50 during last year’s “Flash Crash”.

In the 10 minutes I spent writing this…..the major averages bounced hard off intraday lows with the DJIA rallying about 150 points and SPUs popping 9/10 points. Perhaps capitulation? Tough sledding out there……

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