The most salient aspect of the weekly chart of the S&P 500 is that despite the fact that the index closed 60 points off of Friday's low, the index at 899.22 also closed 198 points from the week's high, which means that the net result of this week is downside continuation. Although I would not be surprised to see the SPX climb to 960-1000 sooner than later, I also think that another loop down to 839 must take place thereafter.

The S&P 500's opening down-spike to a multi-year low at 839.80 spiked the VIX into orbit that hit 70.90 early in the day before reaching a high of 76.94 in the afternoon. It is interesting to note that despite the rally in the SPX, the VIX remains extremely elevated at near 70, suggesting that investors remain very fearful of additional selling pressure on equities.

This is a very good sign from a contrary perspective -- that the VIX has not reversed and plunged in the aftermath of what had the feel of a capitulation low.

In other words, even though the market rallied 350-400 Dow points at the time of my intraday chart snapshot and much more later in the day, the VIX continues to circle 70, giving me added "confidence" that the spike low, and rally in equities, likely has some shelf life this time, albeit amidst intense swings and volatility.

Moving to gold, as the streetTRACKS Gold Shares (GLD) continue to spiral lower -- closing at 83.22 from a high Friday of 90.72 -- I have to put Friday's action within the context of a big picture outlook to see how much damage has been inflicted by the day's weakness. When viewed from a weekly chart perspective, Friday's $5 (6%) decline feels worse than it looks. In fact, based on the weekly chart, current weakness represents a relatively minor pullback within a much larger dominant intermediate-term uptrend.

Be that as it may, the pain of the decline is palpable, but if I use my best efforts to remain objective, I still come to the conclusion that the GLD is "killing time" ahead of another upleg within the 2005-08 underlying bull trend.