DONT RE-ELECT ANY POLITICIAN

One of the most popular indicators of investor sentiment is the Chicago Board Options Exchange Volatility Index ($VIX.X) -- or VIX for short. Dubbed the "fear index" by traders, the VIX measures implied volatility based on the pricing of S&P 500 index options. Higher prices mean investors are willing to pay more to protect themselves from uncertainty.

Over the past eight months, the VIX has been steadily declining. This helped support the rally out of the March low as extreme instability waned and risk appetites returned. But over the past two days, the VIX has started to move higher in a sign investors are suddenly more worried about a prolonged slide in stock prices.

In fact, both the S&P 500 and the VIX have broken out of three-month price channels and look ready to expand on recent moves: Higher for the VIX, which has gained 15% over the last two days; Lower for the S&P 500, which has lost 3%. Last week I warned of a narrowing of market breadth and declining buying power -- as fewer buyers pushed up fewer stocks. Now, we are finally starting to see the result.