Suddenly, the consolidation turned into a correction and maybe even a bear market.

A crucial part of trading a crash is knowing what to do at the bottom. Don’t worry. You’ll receive a flurry of text alerts from me right when that happens.

Many individual investors simply run to the bathroom and lock the door, hoping nobody knocks on the door for a couple of days.

Worse, they dump every stock they have. That’s what makes market bottoms.

Trades that once seemed impossible can now get done, provided you use limit orders.

Let me get this right. Stocks are crashing because:

1) The Federal Reserve isn’t going to raise interest rates anymore.
2) The price of oil has dropped 84% in five years.
3) Commodities have reached multi-decade lows.
4) The US dollar has suddenly stabilized.
5) Investors are yanking money from abroad and pouring it into the US on a flight to safety trade because it is the only place they can obtain a positive return, especially in stocks.

May I point out the screamingly obvious right here?

These are all reasons for 90% of US companies that borrow money and consume energy and commodities to increase earnings and to boost their share prices.

Only the 10% that derive revenues from ripping oil and commodities out of the ground should get hurt here.

Of course the market doesn’t know that. It is anything but rational when we hit big triple digit declines. There was only one direction on, and that was OUT.

And that is where you make your money

Margin clerks rule supreme, squeezing every bit of leverage out of their clients they can find.

The Dow and (SPY) are already posting large negative numbers for 2016.

Of course, I saw all of this coming a mile off.

I have been banging drums, pulling fire alarms, shooting off flare guns, and otherwise warning readers that the technical situation for the market was terrible ever since I went 100% into cash in December.

When the breakdown appeared imminent, I shot out Trade Alerts to sell short the S&P 500 (SPY) in size as fast as I could write them. And I started buying outright (SPY) puts for the first time in ages.