Recent August heart-in-your-mouth moments include: the bailout of the Irish banking system (2010), the U.S. debt ceiling crisis of 2011, and this year's unexpected Chinese turmoil. There could be worse to come if, as some market historians are warning, there are signs of divergence pointing to a top in the market.
"In the US today, we are seeing a significant disconnect between the large-caps (e.g. SPX, NDX) and the smaller companies found in the Russell 2000 and the Nasdaq Composite. And this divergence pattern is indeed worrisome. Historically, we have seen some significant tops form from such "lethal divergences," Hayes Martin, president of investment consulting firm Market Extremes focused on market turning points throughout history, told CNBC.