An ugly day for the markets, which were battered by events outside the U.S....in China, in the Ukraine and in Germany.
That affected Europe--the German stock market is now at a three-month low. It's been an ugly five days.
One key is to understand what happens when China weakens and its impact on the yen carry trade, where investors borrow cheap yen and invest in other assets around the world. When China weakens:
And that's exactly what happened: The yen strengthened, and stocks slumped. You can see this in the very heavy volume of the Wisdomtree Japan Hedged Equity ETF (DXJ), a basket of Japanese stocks that hedges out the effects of the yen, which has been down three percent all day and will close with roughly 10 million shares changing hands, roughly 50 percent more than normal.
Still, if you are looking for obvious signs of panic, it's hard to see. First, the NYSE consolidated tape volume (all trading in all NYSE stocks) was roughly 3.6 billion shares, in line with the average for the year.
Second, while the Volatility Index (VIX) did pop up to the highest levels since the beginning of the month, a level of 16 on the VIX is still not very high...in fact, it was over 20 just five weeks ago. Over twenty is my typical threshold for paying attention to the VIX.
We did see slightly higher volume in the SPDR S&P 500 ETF (SPY) and the iShares Russell 2000 ETF (IWM), which are the two ETFs most widely used by traders, but not so much as to raise eyebrows.
Finally, while it was indeed an ugly day, bear in mind that the S&P 500 is still less than two percent below its all-time highs.
—By CNBC's Bob Pisani