The market tumbled out the gate as advertised and found support after being down more than 300 points.  The major equity indices began chipping away, and buying begets buying.  We can assume its smart money that must have also been dumping gold as precious metal gave up all its gains. 

There’s a huge downside gap for gold that probably gets closed, and if that’s the case, then the countervailing move would be for stocks to go higher.  Upon filling that gap, there’s a good chance of a reversal higher.   For traders, the key is building a base above $1,300.

The so-called fear index, the VIX, is also acting strangely against the back drop of a stock market in free fall. 

After spiking to 26.72 this morning, the VIX has slipped to 23.48.  Make no mistake, despite the calm demeanor of Wall Street, and all the experts, there is some fear and anxiety in today’s session.

     VIX

I appreciate a lot of folks are ready to pull the trigger, but I still want to see things hash out.  I’m impressed with the resolve thus far, but it’s going to take more to seduce firmly entrenched sideline money into the mix.