Stocks take a beating... August 25, 2015 Archives | Unsubscribe CRASH! How to Play "Gray Monday" Stocks take a beating Is this the bottom? Plus: Investors search for answers… Greg Guenthner coming to you from Baltimore, MD... Well that was quick… Stock market drama shot to the top of the newscast yesterday as the Dow Industrials briefly coughed up 1,000 points and world market swooned. But don't worry. The Dow only finished the day lower by about 3.5%. That's a measly 584 points! Not a bad drubbing, eh? Make no mistake: the stock market is clearly broken right now. The Dow just dropped 1,477 points in three days. According to technical wizard Ryan Detrick, that's an all-time record. But the beating delivered to stocks today pales in comparison to the Black Mondays—those historical crashes of 1929, 1987, and 2001, explains Arthur Hill over at Stockcharts.com. "The major stock indices were down 3-5% in early trading on Monday, but down 8-11% over the last five trading days," Art notes. "As far as 'Black Mondays' are concerned, this one is looking pretty tame so far and I would call it just a gray Monday." I can get onboard with that… Crash or no crash, call it whatever you want. That's just semantics. All you need to know is that the U.S. market now has officially entered correction territory for the first time in four years. And if you're one of those folks who desperately needs to assign in-depth reasons to every insane market move, knock yourself out. There are plenty of geniuses in the financial press waxing philosophical over the Chinese meltdown and trying to pinpoint exactly how these ripples will land here in the States. But there's a simpler way to go about it. If you're desperate for the answer to the question "Is this the bottom?" just click on this handy link for an answer (Spoiler alert: the answer is "no")… Here's why I think the market will continue to look ugly for a while: First off, there are plenty of excuses to sell or "hurry up and wait" right now. International markets are tanking. Emerging markets are completely falling apart—even compared to the dismal action we're experiencing in the U.S. And now, the question of what the Fed will do about a potential rate hike during its September meeting is causing alarm. In a nutshell, bad news matters more when the market is tanking. Everyone is grasping for answers. Next, there's nowhere to hide at the moment. Stocks aren't the only asset class falling out of the ugly tree and hitting every branch on the way down. Crude coughed up 6% yesterday to close at its lowest level since the financial crisis. Gold even finished Monday in the red, while silver dropped almost 4%. The commodity bear continues to rip through investors' campsites. Nothing is safe from the wrath of sellers. Finally, take a look at this chart from 2011: If you'll recall, we had big correction in late July-early August as Greece the Eurozone imploded. This rout was followed by weeks of tug-o-war between the bulls and bears, a capitulation low in early October, and even more chop heading into the end of the year. While history won't repeat this pattern exactly, the pieces are in place for a similar outcome. This morning, S&P futures are flying higher. But right now, we don't know how this morning bounce will play out. The market became extremely oversold in the blink of an eye. And the VIX quickly soared into nosebleed territory—so it's no surprise that we're seeing the rubber band snap back early this morning. Today, we'll be paying close attention for comeback opportunities in specific stocks and sectors. A short list of beaten-down stocks could emerge that will offer us some unique trading opportunities… September 2016: Critical Date for Anyone Born Before 1969 We recently gathered information from an "invitation-only" meeting that took place in Washington, D.C., just a few miles from the White House. Some of the most powerful men and women in finance met behind closed doors to discuss a scary financial deal... one that could ruin the lives of millions of Americans. The good news is... a government insider has released details of this dangerous financial deal online. Click here to see this critical information. Rude Numbers When to Buy... When to Sell 179 points dropped from the Nasdaq Composite yesterday. That's good enough for a 3.8% loss... 6,393 U.S. stocks finished Monday in the red. That's nearly 90% of all stocks that trade on major exchanges... $1,150 is where you'll find gold futures today. Gold is down about $3 in early trading... $39.41 buys a barrel of crude this morning. Oil is stuck below $40 once again this morning... 1,934 marks the spot for S&P futures before the morning bell. Stocks are attempting a massive comeback—buckle up! Rude Trends When to Buy... When to Sell "Why this downturn? What has caused it? Ask ten different market mavens and get ten different answers," rants a reader. "Could it be the collapse of the Chinese markets whose economy has been constructed on a base of sand? Could it be the failure of the commodity market and the fall in energy prices caused by the enormous increased petroleum and natural gas production in the United States? Could it be the new round of currency devaluation throughout the world as countries vie for an edge in foreign trade? Could it be OPEC' s determination to flood the market with oil in their attempt to maintain market share? Don't ask the economists they are stumbling all over each other in trying to justify their outlooks and predictions. Truth is people are fearful. Their memory may be short on many things but the market failure of 2007-2008 has remained with them. Fear is the great market mover and this market is moving at lightning speed." Honestly, I can't argue with much of what you wrote. I saw a headline this morning saying that bullish Wall Street analyst were "unfazed". You don't say? Somehow, I don't think the average investors will be so unfazed by a market that plummets one day and rips higher the next. Call me old fashioned… [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] Ignore At Your Own Peril Today's Must Read Links Rickards: "This is the Biggest Accounting Hoax Since Enron" It's Time to Ditch the "American Dream" for a Better One Introducing the Financial "Blueprint" of a Lifetime Add rude@agorafinancial.com to your address book: Whitelist us Additional Articles & Commentary: Daily Reckoning Website Join the conversation! 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