The action was not the result of any particular news item, but rather a breakdown of technical levels and a wave of broad-based selling.
The whipsaw trade has caused a surge in volatility, such that the Volatility Index is currently up more than 60%. DJ30 -518.29 NASDAQ -103.09 SP500 -50.09 NASDAQ Adv/Vol/Dec 436/3.36 bln/2331 NYSE Adv/Vol/Dec 142/1.62 bln/3021
http://finance.yahoo.com/marketupdate/overview?u
It’s all of that and more. There was literally a breakdown in the trading system for over five minutes. I was watching it and suddenly the DJIA was down over 900 points at one point, if I recall correctly. The drop happened very suddenly from 10471 to 9873 in less than ten minutes, based on my 5-minute chart that I’m looking at from my chart service. That’s a drop of 598 points in less than ten minutes to the low of the day. That’s a breakdown in the trading system...not good for investor confidence.