Here's a playbook for buying in the aftermath of big market losses

Investors trying to capitalize on the stock market's sharp decline can turn to the financial crisis for some pointers, DataTrek Research's Nicholas Colas said Tuesday.

The S&P 500 had its worst day since 2008 on Monday, dropping 7.6%. The Dow Jones Industrial Average also had its biggest one-day percentage drop since the financial crisis, closing down 7.8%. Those losses left both major indexes on the cusp of entering bear market territory, down nearly 20% from their record highs set last month. Those losses were sparked by rampant fears of the coronavirus slowing down the economy and an oil price war between Russia and Saudi Arabia.

While the downward move was violent and left a dent in many portfolios, it could be a buying opportunity for some investors. For those brave enough to buy in this volatile market environment, Colas advises using the "financial crisis playbook."

"That may sound extreme, but unless Russia and Saudi Arabia quickly reconcile, oil prices point to deflation and COVID-19 still threatens the US/global economy with at least a short but sharp recession," Colas, the firm's co-founder, said in a note to clients. "That was the recipe for [Monday's] … 'crash' in US equities, and it is a systematic problem."