By Doug Short, Advisor Perspectives:

The world markets have finally registered a wake-up call with the latest move in the Greece financial crisis. The S&P 500 plunged in the opening minutes and then sold off at a steady pace to its -2.09% close, just fractionally off its -2.14% intraday low in the closing minutes. This is the biggest one-day selloff since the -2.28% nosedive on February 3rd of last year. The index is now in the red year-to-date.

The flight to the safety Treasuries was highlighted by the 10-year yield, which closed today at 2.33%, 16 bps below Friday’s close.

Here is a 15-minute chart of the past five sessions.

On a daily chart of the index we see that volume on today’s selling was only 10% above its 50-day moving average and lower than on Friday. The SPY ETF (not illustrated here), which gives a better sense of private investor behavior, saw an 83% surge in volume over its 50-day moving average.

A Perspective on Drawdowns

Here’s a snapshot of selloffs since the 2009 trough.

For a longer-term perspective, here is a charts base on daily closes since the all-time high prior to the Great Recession.

By Doug Short, Advisor Perspectives.

“I had a fascinating conversation with Neile Wolfe, of Wells Fargo Advisors, about high equity valuations and what happens when they collide with a recession,” wrote Doug Short. And here’s what happens: A crash. That’s what highly valued stock markets do in a recession. Read…  What to Expect When This Stock Market Meets a Recession