Ammo Needed

Today we had our VIX double spike to 39 and technology stocks played catch down all day.  We were down huge before news of a possible European Central Bank rescue of Italy and Spain took us off the low to close flat.  Banks continue to act horrible with money flowing into recession oriented stocks.  Money tried to hide in large cap stocks as the Russell under performed.  Many of the big technology stock have come down but could still have room lower.

 Volume was huge today, which some see as an indication of capitulation selling but others see as a high-frequency trading that dominates in ETF trading during high volatility.  So far everything is playing out very similar to 2008 with a jumpy VIX, technology catching up on the down side and a waterfall drop after slicing the 200 day moving average. 

 It is possible that we retest the lows today base on the blue print of our own TARP vote early next week.  But where we will go will certainly depend on the news flow.  Early next week we will have the FOMC rate decision.  With after hour rumor circulating that the S&P may downgrade USA debt; it may be a stretch to expect QE3 at next week's meeting.  But for the bull's sake, Trichet better finalize its rescue plan this week if we want to avoid a failed TARP vote like outcome.  Please put some ammo in that bazooka!