Via Energy and Gold.com:

We haven’t seen anything like this in a long time, and perhaps that’s exactly why we are experiencing such a sharp and vicious sell-off across global equity markets. Not even during the 2008-2009 Global Financial Crisis did we see the S&P futures reach limit down before the cash market open, this morning that was exactly what happened.

It’s scary when seemingly placid markets suddenly start selling off ferociously. Not only is it scary but such a phenomenon creates all sorts of problems for leveraged positions which have to be quickly unwound as losses begin to pile up fast. Moreover, when the selling accelerates fast enough it feeds on itself and generates more selling until a sufficient amount of energy is released that the inevitable rebound begins. From my vantage point, we are within 24 hours of such a moment (and there’s a good chance we already reached it this morning).

This is what a 13% drop in less than a week in the world’s largest equity index looks like:

ES_15-minute

Just after the cash open the S&P almost reached the ebola fear lows of October 2014:

 

SPX_Weekly

The sell-off has reached a wide band of support between 1820 and 1900 on the S&P 500 and we have finally reached ‘correction magnitude’ so the pundits can stop obsessing over whether we will get a correction or not. In fact, this could be one of the most widely forecast market declines in history. Bearish sentiment has been elevated and growing for the last several months and we even had Tom McClellan essentially call the sell-off to the exact day. Needless to say that doesn’t happen often.

Take a deep breath, put the sell-off into context, it was long overdue. There is no reason to panic now, there’s a very good chance that the vast majority of the damage has already been incurred.