Avoiding the Abyss

"It's a bottomless pit, baby. Two and a half miles straight down."
--Catfish De Vries (The Abyss)

After an intraday melt saw the Dow down more than 500 pts, bulls were able to pull the indexes back from the abyss to salvage a close that held onto the August lows. The SPX closed at, yep, 1880.

May be talking my book here but angst does not feel that high here. Sure, folks are talking about the rough start to the year and recognition of the August lows seems nearly universal here. But, as Fleck recently mentioned, it is one thing to be bearish in mind and another thing entirely to be bearish in action here. The past few years have seen many face ripping rallies that have likely conditioned the actions of bulls (take more risk) and bears (take less risk) alike.

In my view, that's bearish on the margin.

position in SPX