If you're checking the market this morning, you've likely run into something new: circuit breakers have put the market in time-out!

Here's Vanguard's explanation of how they work:

Circuit-breaker points represent the thresholds at which trading is halted market-wide for single-day declines in the S&P 500 Index. Circuit breakers halt trading on the nation's stock markets during dramatic drops and are set at 7%, 13%, and 20% of the closing price for the previous day. The circuit breakers are calculated daily.

Level 1 halt (7%)

• Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
• At or after 3:25 p.m. — trading shall continue, unless there is a Level 3 halt.

Level 2 halt (13%)

• Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
• At or after 3:25 p.m. — trading shall continue, unless there is a Level 3 halt.

Level 3 halt (20%)

• At any time during the trading day — trading shall halt for the remainder of the trading day.

The first of these kicked in at 9:34 a.m., meaning trading halted until 9:49. The next level would be a -13% decline in the S&P 500.

I'll post later today on the oil dynamic and how that's adding fuel to the market fire.

For now, understand that this is what market panic looks like. If you're following SMI strategies, you likely already have a large portion of your portfolio out of harm's way, thanks to DAA and bonds. We encourage you to sit tight with the rest and not sell into the face of this.