(From 8/25/2015)  About last week’s column, one of my friends said he agreed with me. Which parts thereof, I am not sure. I stressed the improving American household financial health and in particular, housing growth and debt reduction for everyone but the federal government. I also said I thought the stock market would break out to the upside within a matter of six to eight weeks.

What I then mentioned is that a robust breakout “often is preceded by a fall of several percent in a nasty, unruly, fear-inducing sell off.” But he called me on Friday afternoon apparently in shock that the market was falling into a hole. What part of nasty, unruly, fear-inducing sell off have we not just witnessed? And indeed, it was at least several percent too.

This comparatively violent collapse reminds me of the same thing happening from the same region of the world, Asia, in July and August, 1998. During that episode, the problem stemmed from Thai and other countries’ currencies, dubbed the Asian Flu. There also was a side symptom of the usual South American debt repayment crisis as I recall.

At any rate, the panic was quick and dirty. We had experienced plus 20 percent growth in the stock market for three years, 1995-97, after a bad year in 1994 caused by the Fed’s tightening interest rates too quickly. (Imagine that.) After again rising by over 20 percent by mid-July, the illness began spreading and investors began selling. From July 17 to August 31, the S&P 500 lost 19 percent of its value.

Then what happened? As occurs habitually, the market rebounded a few weeks to September 23rd, up 11 percent from its closing low. But then it lost 10 percent again. On the day of the climactic cleansing plunge, October 8, 1998, the S&P 500 fell by 4.8 percent to 923 before closing almost 4 percent higher than the bottom. Most likely, this market malaise will take a few weeks before it is shaken off as well. In chart patterns, this activity looks like an almost perfect W.

From that blood chilling second bottom through year end, a funny thing happened. The S&P rose another 28 percent to another new high year end close, the fourth in a row of greater than 20 percent. Although we have not had a really bad stock market calendar year since 2008, our recent string has been not nearly as consistently strong. We are not in an over-valued territory when you consider the average company’s sales and profits.

Rules and patterns are made to be broken by exceptions, but I will still be surprised if this slowdown in Chinese internal economic growth leads to the death of our economic world. If the Donald were king now and imposed all of the high tariffs he bandies about, we could revisit the Great Depression on the heels of the Great Recession. The present leadership might do other unwise things, but for now, neither real nor threatened trade wars are in the near future.

Since we sold some positions and increased our cash before the wheels fell off, I look to take advantage by buying some bargains while almost all stocks are on sale. They are certainly cheaper than they were ten days ago. I think they will be higher again someday soon enough.

(Past performance is no guarantee of future results. Advice is intended to be general in nature. All statistics are from Worden Brothers, Inc. TC2000 Service, 2015.)