First, a disclosure: I went long on ^VIX today shortly before the market closed.  This coincides with the somewhat expected news that Fitch has downgraded the sovereign credit ratings of Belgium, Cyprus, Slovenia, Italy and Spain. Where there is smoke, there is fire, as they say, and there are Vesuvian plumes emanating from Lower Middle Earth right about now. On top of the downgrades, all five were given a negative outlook, which is less reassuring than some of the other recent muted blows levied by the apparently omnipotent junta of ratings firms.

None of this is real "news" per se, but neither should be the market's reaction to the now-ubiquitous "Euro Worries" we see speckled amongst the financial headlines every few weeks. These worries are typically accompanied by bursts of market panic and increased volatility.  Some of the VIX's best days this year have come on the heels of European debt shenanigans.

The market snoozed through the announcement today, possibly because Germany's AAA rating again went untouched, but the inclusion of Italy in this round of FUD should not be overlooked.  When S&P downgraded France a few weeks ago, the market shrugged off the news presumably for this reason.  With apologies to a certain geriatric rocker, 2 out of 3 is kind of bad after all.  February options expiration is a good target date for this action.