The post below offered a quick look at the action. However, in the brief few minutes that have gone by, a lot has happened. The Dow Jones Industrial Average (DJIA) is now down more than 500 points. Along with that we have the CBOE Market Volatility Index (VIX) surging above 55. As the monthly chart below shows, that puts the so called "fear index" well above its historical peaks.

Chart Courtesy of Thomson Financial

As I discussed recently in this post - A New Annual High for the CBOE Market Volatility Index (VIX) - Now What? - I think that being aware that the VIX is relatively high is good information to know but I don't think that is enough. I would need to see some signs of life from the market. In other words, I am not one who likes to try to catch a falling knife. The more comfortable approach for me is to note the high level of fear but file it away for when we see the market start to stabilize. That is not the only way to approach the market but it is what I am most comfortable with.

Elevated readings can persist for some time and I believe there is a strong "rare market environment" to be made here. I also think that the point that my colleague Todd Salamone brought up here is worth considering too.