The market isn't open yet, but the futures market is trading limit down. What this means is that the futures exchanges are not allowing any further selling at prices lower than the limit until the stock exchanges open at 8:30 Chicago time.
Current indications are about a 9% selloff at the open. The "circuit breakers" that stop trading on the stock exchanges will stop all trading for an hour if the Dow declines by 1100 points (given current levels).
This is coming off of awful trading in the overseas markets overnight. Asian markets were off about 10%, and Europe was trading in a similar fashion.
There is some speculation that this is the result of hedge funds unwinding. However, this cannot be verified easily, as hedge funds are pretty opaque.
Many of the analysts speaking in the media are speculating this morning that this may be the final wash out. If it is, a big bounce is expected. It could come as early as this afternoon, or sometime next week. Whether they are right or not is something we will see in the very near future. Our belief is that the selloff is already overdone, and the current panic is setting up some very attractive prices. This does not, however, mean that it's time to jump in with every available dollar. The volatility is going to continue for quite some time, and there will be ongoing opportunities to purchase equities.
