It could be argued that even with the wild gyrations of the past few months, many were still in denial about the state of the financial markets. Last week, fear was rife as traders, investors, and the man on the street could no longer deny the magnitude of the global sell off. Some commentators are referring to it as the great crash of 2008. Certainly, there have been bigger one day falls in percentage terms, but the scale and unyielding nature of the October’s sell off of is unique. You only had to take your eyes off a market like the Dow Jones for a second, and it will have moved 100 points in either direction. This level of volatility is almost unheard of. For days markets have continued to show signs of complete surrender, days that may have become capitulation low points in the past, yet the sell off still continued. People looking for the bounce that often follows such waterfall sell offs, have so far unfortunately been too early and quite wrong.

The VIX options volatility index, often referred to as the ‘fear gauge’, has spiked to levels even higher than those registered during the height of the dotcom bubble collapse. This is a broad decline with no one sector out on its own in leading declines. Financials are down of course, but so too is the energy sector, as oil continues to break down. Last year around the quiet period and intermediate high of August, the FTSE had a daily range of around 60 points. Last week it was moving that much every 15 minutes. These are extraordinary times and many technical indicators are flashing at levels never seen before. At best, central governments are hoping that the coordinated rate bomb and localized interventions have stopped Armageddon, there is now no hope of the UK, US, Irish and Spanish economies avoiding recession.