Beginning on Monday, August 6, the S&P 500 has turned in daily returns of +0.23%, +0.51%, +0.06%, +0.04%, and -0.13%. The average return has been 0.15% per day. Is this thing even alive?

The VIX (S&P 500 Volatility Index) hit a 52-week low, closing today at 13.70.  The market hath neither fear nor pulse.  In fact, besides 2008, today’s VIX close was the lowest since 4/5/2005, almost before VIX began trading in late 2003.

We have all heard the old Wall Street adage to “sell in May and go away” until October, as the market historically underperforms in the May-September timeframe. And indeed, after the “bin Laden gap up” at the open on Monday, stocks quickly turned tail. Today, the selling intensified following the disappointing ISM Non-Manufacturing Index for April, with Energy and Materials the hardest hit.