The VIX/SP500 overlay is headed toward the lower horizontal line again, making me cautious.
This cautiousness is for short-term movement. I sold off some stocks that moved heavily and are somewhat over bought (ie ATI and PBR). I still own IBM, AXP, PBR, RHT. A technical argument can be made around some of the stocks being overbought. Since I refuse to sell some stocks (IBM and AXP due to valuation, and RHT is technically sound) at current levels, I chose to add light protection.
The market maybe positioning itself for a 'sell-the-news' on earnings. I will add to the protection if/when the VIX hits the lower horizontal line. I am not expecting the SP500 to go below 1260.