Big Breakdown

The $VIX (Fear Indicator) is at about a 6 week high after an abnormal run-up yesterday.

Yesterday's sell volume was at about a 8 week high.

$BANK is at about a 4 week low.

The Wilshire 5000 and the SPY has made lower highs and lows for 2 days.

The SP500 closed below 1000 and the Nasdaq closed below 2000.

All of this happened on relatively good news.

It seems that the big traders (institutions) have simply decided that its time for a pullback: Anxiety about the health of financials and worries the 2009 global stock market rally may have run its course hit U.S. stocks hard on Tuesday and then carried over.

"But the glass is still half empty. Macro data has improved, but we're in a pattern of destocking-restocking, and the outlook for consumer spending is still grim."

Could it be that Cash-For-Clunkers has depleted much of the savings that Americans have amassed? If that is true, then Christmas will not be the retail boon that traders and the economy need.

I am not yet totally convinced that this is the beginning of a Bear rally, but I am remaining open to the possibility. I am actively not re-investing funds made available by profit taking and stop outs at this time.

Just for the purpose of holding a hedge, I may buy one of the 3x short ETF's on a SPY high today.