The last dip in the market caused some damage to the psyche of market participants. So much so that they are exhibiting signs of reducing risk in a variety of ways.

In late September I showed a chart that I use for general clues about the market. It compares a short of the S&P 500 Index (SH), an actively managed short fund (HDGE), and mid-term volatility (VXZ).

I’m starting to see more things that suggest the worst isn’t behind us. The churn during March and April didn’t show big signs of fear or mass selling.

The actively managed HDGE is not over bought and just now making a breakout. That is a scary thought for stock market bulls. It’s not just HDGE either.