Panic Building/Climaxing?

In timely response to my last post, all the major indexes broke the July lows and that certainly did send the put/call ratio to levels that could be considered very extreme. However, the 21 day moving average of the put/call ration has ample room to fall to match extremes seen earlier this year, so I think there still exits some argument that we can see lower prices still.

Sentimentrader.com posted some data showing a once in a century type panic in the credit markets occurring right now. Typically this has coincided with important market bottoms and created good investment opportunities. However, I would caution that crash type scenarios have happened before, and something truly extreme could happen gain. I would advise waiting this market out to give it a chance to prove itself to the upside before buying stocks again.

When markets enter climaxing downside moves, it typically occurs swiftly, with little pause, and can often end with a huge price decline unseen in recent days.

I am maintaining some put options but have exited a few losers to decrease exposure in case the market reverses sooner than I expect.

Pete