'The selloff is starting to feel more real': Wall Street explains why this massive stock drop is different

Reuters/Brendan McDermid

• The stock market took a beating on Thursday with its second massive loss over a four-day period.
• Business Insider spoke with a handful of market experts, who explained how Thursday's market reckoning was different than Monday's.
• "The selloff is starting to feel more 'real,'" one source said.

Things just got real in the stock market.

Or so says one equity expert about Thursday's meltdown, which saw the Dow Jones industrial average plunge more than 1,000 points. The huge decline added to the woes facing the stock market, which already saw its biggest single-day decline in almost a decade earlier this week.

While the collapse on Monday was largely attributed - or at least exacerbated - by forced selling from machine-based investors and the unwinding of massive short-volatility positions, Michael Antonelli of Robert W. Baird says this time it's all about the human element.

"The selloff is starting to feel more 'real,'" Antonelli, an institutional equity sales trader and managing director at Baird, told Business Insider. "Today wasn't driven by some messy unwind of a vol structured note, today had real selling from real accounts. Everyone is using fancy terms like 'de-leveraging' or 'de-risking,' but really it's just good, old-fashioned selling in the face of rising uncertainty about the market."

"10%... no one can ignore it anymore," he added.

It was a sentiment shared by others interviewed by Business Insider, who acknowledged an escalating situation in markets, as well as a mixture of fear and nervousness creeping into investor psychology.

Here's a round-up of the experts we surveyed, who shed some light on how Thursday's action feels different:

Joe Bell, senior market strategist at Schaeffer's Investment Research

"You saw some people with the buy-the-dip mentality who lost confidence after we finished yesterday near the lows. We came in today with a lot of weak hands on the long side, who were trying to buy the dip, but were quick to get out of the market when selling resume. Those sellers are unloading the positions they were trying to buy the dip on."

Benn Eifert, chief investment officer at QVR Advisors

"Retail is conditioned to buy the dip, but now they've gotten run over buying each leg down this week and last. I could see them taking a pause."

Luke Oliver, head of ETF capital markets at Deutsche Asset Management

"I'd almost argue that the fundamentals that drove the tipping point for Monday's technical trade are in play again today except without the technical trade. We are seeing stocks make lower lows but volatility is not making higher highs. So I'd put that down to being a but more fundamental. On Monday, the volatility story took over."

Kevin Caron, a market strategist and portfolio manager who helps oversee $180 billion at Stifel Nicolaus

"You just have a market that ran a little bit too far. This is not a systemic issue. It's a market correcting to where the economic reality is."

Akin Oyedele and Rachael Levy contributed reporting.