Wednesday was only the 18th day in 2013 that SPY lost more than 1%. The VIX jumped over 10% and VXST (9 day volatility) spiked over 20% which is an exceptional one day move. It appears that the panic button was hit on Monday as protection is being purchased ahead of the December 18th Fed statement.
The market is now oversold with SPY showing a ConnorsRSI reading of 18.60 and IWM reading a fairly rare single digit ConnorsRSI reading of 9.71. This pullback, like every pullback, will test the 4 ½ year old bull market and a normal move will be a bounce higher within 1-2 days.