I can't remember the last time oil was down. Well, that's an exaggeration, but the relentless ascent that has taken oil to $129 this morning has been astounding. You can see why no one wants to short oil.

The energy stocks are again higher, while the rest of the market is sharply lower. Financials are weak after AIG said it plans to raise a total of $20 billion, and the brokers saw more earnings estimates cuts this morning.

The semis are also weak, following the cautious comments yesterday from SNDK's management. Retailers are also lower after a weak earnings report from Home Depot (HD). Drug stocks and biotechs are bucking the early weakness so far.

The core PPI rose +0.4%, above expectations; Asian markets were lower across the board overnight; the dollar is down vs. the Yen and Euro; gold is back above $900; the 10-year yield is lower at 3.80%.

I have commented recently about the low put/call ratios and declining volatility index, but this morning they are flashing renewed signs of investor angst. The put/call is very high at 1.28, while the VIX is +6.3% higher to 18. Let's see if this helps keep this selloff from getting out of hand.