A trader at the New York Stock Exchange reacts on Oct. 19, 1987, when the Dow Jones industrial average plunged more than 22 percent — the biggest single-day drop in history.(Maria Bastone/AFP/Getty Images)

«Keep your Cool.»

Traders,

Stocks are falling for the fourth day to kick off the new week. With the wallop, the S&P 500 is officially breaking to a new bear market low. Fear is as rampant as you’d expect, with the CBOE Volatility Index rocketing past 33. Meanwhile, Bitcoin is plunging 20% and fast approaching $20,000.

All eyes are on the Fed this week for their next rate hike. While the market consensus is for another 50 basis point hike, I think the markets would welcome an even more aggressive rise of 75 basis points. The markets are already spooked; why not do it and catch up even quicker to inflation readings that have left them far behind the curve?

As for how to respond to the market madness – keep your cool. It never pays to panic. The market will bounce, viciously so. But it may take some time. If you’ve been tracking the chart, you’ll know the S&P 500 broke support last Thursday, so we did have an unmistakable signal that bears were taking over. That would have been an excellent time to reduce risk and play defense. If you did, then today’s decline shouldn’t hurt as badly.

And, if you didn’t, well, learn from it. We will get another rally allowing you to exit or improve underwater positions.

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Chart of the Day: Bitcoin($BTC) Beatdown

The meltdown in crypto land is heating up again. Bitcoin is down 20% today, bringing untold pain along with it.

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