Jim Cramer's post "How the System Failed Us Today" quickly highlights similar observations of ETF activity leading the pack in today's shock event. Cramer suggests buyers weren't able to get into the market quickly enough, which could explain behavior observed in the ETF price to index error.
Although I don't usually agree with Jim Cramer's perspective, his indication of aggressive ETF selling is supported by the data. Considerable analysis of how prices significantly strayed from their underlying index fundamental is necessary. It certainly appears that the market hasn't adjusted to the half-trillion dollars of leverage the ETF market represents, let alone the distinctive behavior it presents in market shocks.
Regardless of China contagin conjectures, the rightful name for 2/27's shock is the "ETF Crunch: Part I"
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