Just A Whiff Of Panic As Streaks End

As stocks continue to follow though on the negative conditions that had been building for the past few weeks, we're starting to see the very beginning signs of pessimism, or even outright panic.

Volume in inverse ETFs is on track to exceed 1.2% of total NYSE volume, which (if it holds into the close) would be a new record extreme.

As a result of the spike in concern, the VIX is popping. Using the old calculation, the VXO index based on S&P 100 components, this is the second 20% jump in a week, which has led to good, but not great, returns. Especially over the next 1-3 months.

The losses are triggering an end to some notable streaks. The S&P is ending its near-record stretch of calm without a 1% up or down move, with a large down day. That has usually led to some further short-term weakness but decent medium-term results.

The Russell 2000 index of small-cap shares is ending its long run above its 200-day average, suggestive of some of a new bear market. When it's done this in the past, it has usually suffered some more pain over the next couple of weeks, then a  rebound.

We'll have to see how the next hour shakes out, but when a day goes as long as Wednesday has without much of a bounce, it tends to keep going into the close. That will give us the chance of seeing some real panic-type readings in the very short-term, and that has usually led to another 1-2 days of selling before a nice bounce. We'll have to see what the end-of-day figures look like.