As watch today's drama unfold, I thought it might be interesting to point out the long-term charts of the S&P 500 (SPX), Dow Jones Industrial Average (DJIA), Nasdaq Composite (COMP), and Russell 2000 (RUT).

Chart Courtesy of Thomson Financial

This monthly view shows us how the indices have traded since the mid-1990s. What caught my eye is that the S&P 500 (SPX) and Dow Jones Industrial Average (DJIA) have now pulled back to their 2002 lows. The Nasdaq Composite (COMP) isn't far from doing the same.

My long-time friend (and occasional contributor to our website), Al Schwartz, made a surprise stop by the office today and we were discussing these charts.

The most interesting aspect to me is that the S&P 500 (SPX) has now "played out" the bear market drop that more or less ran from October 2000 through October 2002. The current drop began in October 2007. In other words, the SPX has retraced the same drop but in half the time.

That brings us to the CBOE Market Volatility Index (VIX). Here is the monthly chart of the so-called "fear index".

Chart Courtesy of Thomson Financial

I think that everyone is aware the VIX has been hitting "historical" levels but there is more to the story. Last month I noted that high VIX readings can be sustained for some time. Furthermore, a point reiterated last night was the VIX hadn't yet diverged from historical volatility of the S&P 500. This is something that my colleague Todd Salamone has been arguing for nearly two weeks .

However, it looks like that relationship may be changing here. I currently show near-term historical volatility on the S&P 500 to be around 63 as the VIX is above 73. On a percentage basis, this isn't yet at the sort of premium Todd noted at past bottoms but it seems like a step in the right direction.

The bottom line is that we have the S&P 500 (SPX) nearing levels that marked an end to the previous bear market and we have what I would consider to be the first signs of life from the CBOE Market Volatility Index (VIX). In other words, the table seems to be set, now we just need to see if buyers are willing sit down and eat. As I said earlier, I am looking for signs of a technical bounce so that is what I am watching here.