Such a move will not terminate in a sudden drop, typically a retest and another attempt higher with deteriorating internals is often the case. Right now, volume is expanding, new highs are expanding new lows are contracting and the equity P/C ratio while quite low, not yet extremely so. Yes, VXN made a new low, but it and VIX need to turn before you can become negative. But yes, it is not an area to go gang ho long, I wait till I get retrenchments and in many cases simply take profits when offered, of course, that can cause my cash position to explode (as it did today...), but hopefully, individual stocks (like BSTE and COCO) will provide rational reentries. AGM is also approaching ever so slowly the sub $22 area where it becomes interesting for a doubling up.
Zeev
