An oversold bounce was naturally due, with perhaps a bit more to come. But the oil market's doing exactly what I said it would – cratering!

Meanwhile, in la-la land, stocks have been so focused on the decline in oil prices that they just ignored the other big trigger for a stock decline.

And that came yesterday, when the Shanghai Composite index of Chinese stocks moved 3% below its August low of 2,850!

I wrote back in June of last year that the bubble in Chinese stocks looked ready to pop! Sure enough, it started the next day, fell about 32% in a month, rallied, then fell another 26% by late August. Together, that was a crash of 45%, from a high of 5,200 to a low of 2,850 in just two and a half months.

Then, after testing that level three times over the past two weeks – and avoiding it for several months – it finally broke beneath that level on Tuesday's trading day in China.