It appears that many in the market today don't understand what is going on. Let me give you my brief take and will be providing more info over the course of the weekend.
1) The bubble in Chinese real estate and construction seems to be popping. Infrastructure and Construction combine for 40% of GDP, which is unheard of in any modern economy. They implemented a massive 26% of GDP financial stimulus back in 2008 that gave the economy one last push. The speculation over there in real estate is rampant.
2) Commodities are getting hammered. China uses over 40-53% of the following commodities in the following order: Cement, Iron ore, coal, pigs, steel, lead, zinc, aluminum, copper, and nickel.
3) The CEO of Rio Tinto has hinted that demand is slowing.
4) The Canadian economy (and Australian economy) depend heavily on commodities and economy will be effected heavily by this. I would strongly suggest avoiding the broader market in Canada and anything related to commodities.
Just to finish this isn't the end of the world, but during the last ten years many commodities have tripled, quadrupled, or even more. Trees don't grow to the sky. Even gold seem to have broken down and is selling off along side the broader markets.
A number of very high quality companies are currently on sale. I have commented on many of them them in the past. Walmart is quite cheap.
One benefit to this unwinding of commodity prices is that we will all be paying less for gasoline in the near future.
Disclosure: I am looking to short commodities.