Options market sentiment indicators flashed a healthy dose of fear this morning, which could portend a short-term rally on the heels of this morning's downdraft and snapback action. But the levels of anxiety were nowhere near the extremes seen in big market turning points in the past, so any move higher may be short-lived.

"I think we're due for another January-type rally," said Rod Jamieson, vice president of options at

First Union Securities

, which was a "nice tradeable rally." Beyond a short-term advance, "I don't know," he said.

The

Chicago Board Options Exchange Volatility Index

, or VIX, known as the market's fear gauge, soared as high as 36.57 this morning before easing back to 33.82. The VIX rises when

put-

option buying on the

S&P 100

, or OEX, increases. Investors buy put options to either protect long positions or to speculate on further downside in the underlying security.

The VIX intraday hit 37.72 on Dec. 21, an early signal to some of the rally in January. However, as everyone knows, it signaled only a short-term rally, as the OEX has given back January's rally and is now trading at levels not seen since late 1998 and early 1999. During April's carnage, the VIX soared as high as 41.53, its 52-week intraday high.

In October 1998, the VIX soared as high as 60.63. The all-time high reading on the VIX came during the stock market crash of 1987 when it soared to 172.79.

Some options pros look at the VIX with a wary eye, however. And with a good number of options traders, the VIX has fallen out of favor. This is in part because volume in OEX options has declined significantly -- as the volume in other options products, like the

Nasdaq 100 Unit Trust

(QQQ) - Get Report

, better known as the QQQ -- have risen over the past few years, suggesting to many that the VIX may not be as reliable a sentiment indicator as it used to be.

As far as

Nasdaq 100

fear barometers go, they aren't near levels seen in recent major selloffs, either. The

American Stock Exchange's

volatility index based on certain options prices of the QQQ. The QQQ volatility index is generally known by its ticker symbol QQV. The QQV was up to 62.65 after jumping up to 65.32 intraday. Data for the QQV only goes back to September. Its closing high, according to data, is 75.40, which it registered on Dec. 20.

The

CBOE Nasdaq Market Volatility Index

is a mile from reaching its high which it set last April 14, with a reading of 93.17. The VXN was up 0.66 to 73.15 this morning.

Generally, there is an inverse relationship between the direction of these volatility indices and the price movement of the indices. Traders interpret the VIX, VXN and QQV as contrarian indicators, meaning the higher they go, the better, because it means a cycle of fear is ending.

Another gauge of investor sentiment, the CBOE equity put/call ratio, was sharply higher, but it has eased off its peak level of the day. The equity put/call ratio was lately at 0.78, meaning that for every 100 calls that traded this morning, 78 puts traded. High readings on the put/call ratio indicate fear in the market, and to contrarians that is a positive development.

The CBOE equity put/call ratio 21-day moving average, however, is still in an uptrend and is not giving off a buy signal. Some market watchers follow the 21-day moving average as a signal to get into the market and exit.

According to

Schaeffer's Investment Research

, the 21-day moving average as of Tuesday's close was 0.652. That moving average is closing in on levels not seen since late in December. Many options analysts who follow the 21-day moving average wait for the average to peak and turn down before it gives off a buy signal. It has yet to turn down.