The markets seemed reasonably normal this morning. In fact, at one point, RUT was actually up several dollars and outperforming SPX. That seemed positive, but that all changed around 2 pm ET. SPX traded down hard for the last two hours, closing at its low for the day, $1875, down $31. RUT didn't fare as badly, trading down $4 to close at $1049. Trading volume declined from Friday with 2.8 billion shares of the S&P 500 stocks trading. Trading volume dropped 1% on the NYSE and decreased 12% on NASDAQ. Volatility spiked up over three points with the VIX closing at 24.6%.

I think it is safe to say that the "buy the dip" crowd have been flushed out of the market - or they are in a lot of pain. There was no economic data to account for this afternoon's rout. Most analysts attributed it to SPX trading below the 200 dma and triggering a number of sell orders. SPX has not broken the 200 dma in about two years.

My Nov 1810/1820 put spreads are far OTM, but those spreads aren't nearly as safe as as I once thought. I hedged the position with Dec puts today, and may close the put spreads soon if this continues. My hedge puts gained 15% just in the last hour of trading today. That helped ease the pressure on the Nov iron condor position.

It is hard to predict what event, if any, may kick in support for this market. Since it is difficult to point to the impetus for the collapse, it is equally difficult to predict what may end the bloodshed.

Presumably, you have already hedged your positions or closed them out as appropriate; now we wait out the storm.