U.S. stocks plummet at open; Dow drops 1,000 points

[Free Vulcan]

http://www.marketwatch.com/story/us-stocks-plummet-at-open-dow-drops-1000-points-2015-08-24

U.S. stocks plunged to lowest levels since last October after a rout in Chinese stocks triggered a world-wide selloff of risky assets such as equities. The Dow Jones Industrial Average DJIA, -3.94% dropped 1000 points, or 6%, to 15,441. The S&P 500 SPX, -4.14% opened 100 points, or 4.9%, lower at 1,874. The benchmark index is down more than 10% from its peak reached on May 21. The Nasdaq Composite COMP, -4.49% began the day down 360 points, or 7.6%, to 4,349.

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The market had stabilized overnight fairly well like I thought, but this new downdraft was surprising. It's tough calling it when you got the China wild variable going on. And I think you had the late comers trying to pile on, now it looks like they're going to get short squeezed. Nonetheless, here's some things that can be gleaned.

1. China has arrived and is a force to be reckoned with.

2. Stocks are volatile, and anyone who thinks otherwise got a rude awakening this past week. Stocks are not govt treasuries and we've gotten to thinking that they are. We are used to tiny little moves percentage wise and everyone freaks out when the markets actually do move, especially the Baby Boomers.

3. The markets have gotten lazy. Stevie Wonder could have seen this coming with China and the selloff should have started months ago. We've been wandering in a money flooded bubble of apathy and were not ready when the ground shifted. Trust me, this is healthy.

4. The selloff didn't happen because the govt keeps propping things up till the excesses build and then it all falls apart in dramatic fashion v. over time and more slowly. Whether that was the plan or not remains to be seen.

5. This isn't 1987. The market is nearly 10X what is was then. Everyone freaks out over 500 or 1000 point moves on the Dow (especially the Baby Boomers) without realizing that percentage wise it isn't all that much and is, or should be quite normal. Might not hurt for some to fast forward to 2015.