Okay, a bit dramatic :) I do not care what the futures are indicating because I will play the the market accordingly.
The reports from Libya are acting as a catalyst. Gaddafi's son warns of civil war, and the actions taken by Libya over the weekend IMO crosses that line of humanity. The people of the countries that are protesting want to live in a world of opportunity. The leaders of these countries can either get on board or get out of the fucking way. People are fighting for their opportunity, and they will get it one way or another.
Now for the potential market damage. Libya has a GDP of $89B, from an economic perspective its irrelevant. If the market wants to use the threat of civil war as a catalyst to bring down the market, so be it. But the created market discount will be an opportunity. The global economy can handle a certain level of instability. (ie the Iraq war or better yet, just research market performance during wars and try to extrapolate what a civil war in a country with a GDP of $89B would do. In a few words, not much.)
A more extreme bear would point to the oil market, and with the disruption of Libya's supply, crude would skyrocket causing gas prices to rise crippling the consumer. Hence, the global economy and markets will suffer. That argument is bullshit.
While a rise in oil prices works really well for my PBR position, lets be realistic. Oil production and demand has approached tight levels, which merits an elevated (80-90 handle) price for crude. But there is plenty of stored supply to handle a short-term disruption like this. Lets not forget, during the recession years one of the greatest trades was to buy up as much oil as possible and store it in tankers. Well, I am sure, now, the traders/investment banks making this trade will allow this supply to enter the market. (If they don't they are horrible traders, and their firms should fire them.)
To me, I see very little systemic risk here. But this could be an excuse for the big-boys to sell. There are multiple SMA supports from 1300 to 1320, and ultimately the 62SMA.
From a valuation perspective I am comfortable adding position with a decline to the 14SMA, but from a technical perspective I have to see the velocity of fear.
If the VIX approaches 21ish over an act of people wanting to give themselves more freedom and opportunity, I will cover all my protection and start adding to names I wanted to add.