Too Soon To Call This Correction Over

The fear guages were spiking higher again today, as the market sold off into the close. It looked for a while like the market was going to bounce, but the late day weakness that developed crushed any hopes the bulls may have had.

The volatility index (VIX) rose to hit new 4-year highs, nearly reaching 32. The CBOE put/call ratio opened at 1.63, an extreme reading. Fear is not the best timing indicator, but it is a necessary ingredient for a market bottom. I have not yet tried to sound the all clear, and suggest that "the" bottom is in, but I continue to believe we are getting close.

The SPX closed below its Jan.1 levels, erasing all of this year's gains. But many of the other, more growth-oriented indexes are still in positive territory. The forced liquidations feel like it is spreading into everything, as no group was saved from today's selling.

There was also a lot of chatter that there was additional pressure on the market today due to Friday's upcoming options expiration. This is hard to gauge, but we know from past experience that expiration week can add to the volatility in the market.