Some were asking me recently why, out of nowhere, we see such heavy selling and massive moves up in volatility. With such sharp moves in one day, it is bound to give one a stomach-ache. When waters are calm then all of a sudden the tide starts to get heavy is when we begin to really feel the pressure. Fortunately, we have not seen too much of it, but that doesn't mean we won't see anything like it down the road. In fact, bank on it!

These days, fear is created mostly from momentum traders, no-bid markets, ETFs and volatility ETNs that tend to tilt money to one side of the boat before beginning to tip over. When these flashes of excess in volatility arise after long periods of complacency, the conditioned investor/trader is jolted out of kilter and floating in an area that is quite unfamiliar.

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We have all been there, right? Just last Thursday, when the VIX climbed a staggering 44% in a day, many of the volatility instruments were up sharply as the markets were pounded mercilessly. With the heavy dose of volatility, it is no wonder bids disappear -- what market maker wants to get stuck in that mess? We saw this occur in May and a few times in 2016 around events (Brexit and the election).

As a result, the excesses in the market are wiped away, as the reset button is pushed. It seems these moves happen so fast it is difficult to catch up to them! Perhaps when we see these happen again, rather than listening to the business media (often talking their book), you will understand the gravity of the situation, hold on, take a deep breath and -- wait for it to end.