SPX UGLY

Markets closed at the lows of the day and sank further after the close as the YM futures ended down 400 while the DJIA was only down 367. The SPX closed near the 50 day SMA (1,497) and it will probably be probed on Monday.

Anyhow, as mentioned, I expect a sell off to open on Monday morning and that will probably be the dip to buy.

VIX/VXO closed about 25% above the 10 day SMA although not near the August high of 37.5. I don't expect we will see those VIX numbers any time soon as we probably get some encouraging earnings/guidance news next week. Also, before long the October 31 rate cut will be on the front burner and will probably lead to higher prices.

Finally, I suggest that anyone reading take a good luck at the relationship between the VIX and SPX above. It tells a pretty good story.