We have all seen our share of bear markets, but the past two days have been ones for the record books. Yesterday, SPX lost 2.1% of its value and I think of a one percent loss as a big day. But today, SPX traded down even more strongly, losing 3.2% of its value. SPX closed at $1971, down $65. SPX is now down 4.3% for the year. RUT didn't trade nearly as bearishly today as SPX, and at one point this morning, RUT actually looked like it might trade up to yesterday's close, but it couldn't hold and closed down $16 at $1157. Naturally, volatility has spiked with the VIX hitting 28% today, the highest level all year.

Trading volume was higher today, although at least some of that was due to option expiration. 3.5 billion shares of the S&P 500 traded today. Trading volume rose 28% on the NYSE and rose 25% on NASDAQ.

I was considering hedging my Oct RUT 1060/1070 put spreads this morning, but decided on the conservative path. This market is just too ugly. I closed those spreads for an 11% loss. This brings our year to date gains to +34%, way ahead of the S&P 500. If we get a bounce, I will work at re-establishing my October condor position.

SPX closed at its lows both yesterday and today - a very bearish pattern. After yesterday's extreme bear market, I expected a bit of a bounce, but that faded quickly and today's trading even exceeded the bearishness of yesterday's market. Next week will be interesting. And, by the way, don't tell me this is all about China.