| As you all already know, this past Monday the markets were routed, which was started by a tidal wave of selling in China. But what happened in the US markets? Was it the normal scapegoat that everyone on television wanted to blame - HFTs? No. As it turns out, there were serious problems in Wall Street's ETFs. Wikipedia's definition of an ETF is: An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks.[1][2] An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.[3][4] ETFs are the most popular type of exchange-traded product.[5] The selling of the underlying stock caused massive selling in ETFs across the market, which overloaded market makers. Because of the volatility, market makers radically increased their spreads to compensate for their risk. This caused market sell orders to be filled at horrible prices, which exasperated the problems by forcing the ETF prices even lower with wider spreads and even less liquidity. Even CNN felt reported on this situation with the following: The circuit breakers were implemented more than 600 times on ETFs, the increasingly-popular securities that trade like stocks. ETFs hold a basket of stocks, removing the risk of betting on a single company. ETF.com examined the pricing action and discovered at least eight ETFs that showed "flash-crash" style drops at the opening of trading. ETFs that experienced panic selling are far larger and wouldn't be expected to have that kind of turbulence. For example, the iShares Select Dividend ETF (DVY) plummeted as much as 35% at its lows. That's a stunning move considering this BlackRock (BLK)-backed ETF is worth over $13 billion and is focused on stable American stocks that have a long history of paying dividends. None of this ETF's top holdings -- like Lockheed Martin (LMT), Philip Morris Internationa (PM)l and McDonald's (MCD) -- suffered losses north of 11%. It was even worse for the Guggenheim S&P 500 equal weight ETF (RSP). The $10 billion fund, which holds some well-known stocks like Chipotle (CMG) and ConAgra (CAG), plummeted nearly 43% at one point on Monday. BlackRock ETFs weren't the only ones slammed; the Guggenheim S&P 500 Equal Weight ETF plunged intra-day Monday by as much as 43% at its worst level of the sell-off, which is amazing considering it is a $10 billion fund. 
But it's not all bad. After all, Wednesday had the 3rd largest rally of all time! Third huh; what about the other two? I didn't hear it mentioned once in the financial press that the prior 2 were during the CRASH of 2008. Said another way, it only happens in bear markets, so I wouldn't get terribly excited about Wednesday's mega point gain. 1- 2008, 10-13 9,387.61 +936.42 +11.08% (MID-CRASH) 2- 2008, 10-28 9,065.12 +889.35 +10.88% (MID-CRASH) 3- 2015, 08-26 16,285.51 +619.07 +3.95% (TODAY) Trade well and follow the trend, not the perma-bull OR perma-bear "experts." Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia. | 
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Keep a civil tongue.