From the looks of things, you’d think Hallowe’en opened rather than closed the month of October. Stocks sold off hard on big volume and Treasuries were scooped up hand over fist by investors looking for a safe haven.

So, what spooked the markets? You can’t say there weren’t plenty of catalysts. Mounting global tensions and weaker-than-expected economic data led the list. There, too, was some carryover from the end-of-the-quarter window dressing on Tuesday.

Investors, already leery of October sell-offs, are left wondering if the equity bull run is finally sputtering to a close.  It’s true that the S&P 500 has broken below its 50-day moving average (that, in fact, happened a week ago), but there’s still some daylight between the index’s current price and its 200-day average. If you look at the daily chart, you’ve probably got a right to be scared.

Maybe you shouldn’t be worried, though. Not yet at least.

Equities, like it or not, are still the best bet in town (aside from Oregon football). And, no matter how defensive investors may seem now, they haven’t altogether flipped the risk switch. Wholesale fear would be signaled by more significant slippage in a key ETF spread. 

Everybody seems to think of the SPDR S&P 500 ETF (NYSE Arca: SPY) as a bellwether for domestic equity. A lesser light is the iShares S&P 100 ETF  (NYSE Arca: OEF), which tracks the bluest of the blue chips within the S&P 500. Because of their higher dividend yields and their lower P/E ratios, the components of the narrower index appeal to more conservative investors

Outsized inflows into OEF, indicating a more defensive mood among equity investors, tends to narrow the spread between its price and that of SPY. At the bottom of the Great Recession, SPY’s premium to OEF was less than $40 per share. Recently, the spread topped $111 before pulling back to its current level around $107.

Here’s the thing: a $105 spread is a tested support level as well as the current plateau for the SPY/OEX 200-day moving average. If that level’s taken out decisively, it’s time to worry.