http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p76542086636&a=266398464

China, oil, Janet…real traders playing golf in the Hamptons…  What does the reason matter?  It matters not.  Indu down 1100 at one point and finishing 588 down.  Thank God!  Maybe the incessant mewling and whining of the baby bears will shut up now.

Well that won’t happen.  The babblers will find something else to babble about.  They have to do this to get attention.  But rather than paying attention to these guys we should pay attention to  the chart and the decisions that must be made.  A landslide like this trips stop levels.  Here both the new high and the wave low stops are broken.  If you have been running your portfolio assuming the Basing Points system you now have to face the sell signal.  We have this problem ourselves.  Several family accounts have been run on the BP system for years.  Tomorrow we will be flattening these acounts.  As always our decisions are not set in concrete, and are under constant review.

http://stockcharts.com/h-sc/ui?s=%24INDU&p=D&yr=1&mn=7&dy=0&id=p16908009824&a=417742260

Readers can use more than one method here — selling, heavy hedging, scaling out, prayer, throwing things, kicking the dog,..  Timing any of these may materially affect profits.  Overnight futures are trying to rally so some real time management might be profitable.

Our other opinion is that this looks like a climax — the action and the volume look climactic but we won’t know that till tomorrow.

Remember that old Chinese curse:  May you live in interesting times.