A massive sell-off occurred across the board today in one of the steepest market declines since the 2008 credit crisis. On the day, the Dow (chart) lost 5.5%, the Nasdaq (chart) -6.9%, the S&P 500 (chart) -6.7% and the Russell 2000 (chart) lost -8.9%. This is not a typo my friends, panic and fear has a firm grip on the markets right now. To confirm this all you have to look at is the VIX index (chart) also known as the fear gauge, which soared an unprecedented 50% today.

I think it’s fair to say that the markets are overwhelmingly oversold and the fear factor is overdone. However, from individual investors to institutional investors, no one seemingly cares for the metrics or logic, for investors are selling indiscriminately now and will ask questions later. Which takes me back to the hysteria in the 2008/2009 crash and prior market crashes in that when the fear subsides and the forced selling ends, opportunities do present themselves. For now it’s probably best to sit on the sidelines and let the fear, panic and margin call selling abate.

~George