Compared to the one day drop we had on August 10, the current pullback is more severe but the VIX has actually been lower. The VIX September futures closed at 15.25 on August 10, and 14.95 on August 18, despite the SPX being lower on August 18 than August 10. Even with further weakness today, the VIX futures are actually negative on the day.
Although this pullback doesn't look like it will be a quick snapback higher to SPX 2470s, I also don't expect a big pullback that would crack 2400. We could have a drive down to the 2410 area but I expect that to hold as there is already a lot of put activity in the equity options and the fear is already palpable on financial TV. Fast Money on Friday was uniformly bearish, expecting more weakness. When that happens, its usually a fade.
I have added to SPX longs today and will look to play for a short term bounce.
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