Markets continue their slide, risk measures (spreads, VIX) continue to rise. Markets are powering through any good news and looking to sell. What appeared to be a mid-day recovery turned out to be a mid-day psych-out.
A couple things are contributing to this. Markets have a lot of room to give back. A 1200 S&P is pretty lofty given the economic problems in the world - mind you, things are improving. But after a massive rally some consolidation should be expected.
Second, markets are looking through European aid packages and are telling us they are not enough. Specifically, spreads are indicating serious concern with the European banking system and sovereign debt.
My view: the more markets sell-off the more bullish I will get. However, I will not attempt to catch a falling knife.
