Bad Start

It's ugly out there this morning with almost anything equity-related indicated to open down 1% or more.

Patterns and stats are likely useless at the moment. Traders and investors are going to be scrambling to adjust after a rough year for many in 2015. Nobody wants to start the year with a big loss that's going to take weeks to recover.

About the only safe bet is that volume is going to be high.

There is no precedent for such a large gap down to open a new year, at least not since index futures were introduced in 1982. The previous largest gap down open on the first day was in 1984 when the futures opened down -0.8%. Stocks rallied right from the get-go that day and tacked on about 3% over the next few days.

For what it's worth, if the S&P loses 1% or more today, here are the other times it has done so since 1928 on the first day of the year:

It rallied over the next month 9 out of 12 times, averaging excellent gains though the losers were all large as well.

As discussed on Friday, the overall environment is questionable at best, and there are few indications at the moment that trying to buy into the gap down is a low-risk, high-reward scenario.