Is this October of 2008? Or is it October of 2011? Or is it something in between?

I pick those two because they represent two vicious oversold periods where we got big bounces. The first created a terrific selling opportunity. The second you had to hold on.

I like these two because they present the extremes related to stocks and extremes related to the economy.

In 2008-2009 we had several of these gigantic declines and rallies and the most treacherous ones were those of October of 2008 when we were very much in the soup. TARP had just passed and we got a gigantic relief rally but not long after we went right down because bank failures continued to occur. We experienced two more oversold rallies that you had to sell into before you finally got the bottom in March of 2009 when Ben Bernanke told 60 Minutes there would be no more runs on any bank. They would be stopped.

It was a convulsive time and you had to sell every rally because, in retrospect, the economy was just getting worse and worse and the talk at the time of the bottom was the need to nationalize all the banks because nothing seemed to be working.

I think we need to take that period off the table simply because that was a prolonged series of lurches, anyone of which could have created something we could never have gotten out of without wholesale change to the government. In the end the center held.

But not by much.

In 2011, there was nothing actually structural here. A rough patch imported from Europe. If you read the headlines they appear as if short-sellers hijacked the papers. There's just endless articles about how weak European banks, not recapped like ours, could bring the world down. It's almost preposterous what a good buying opportunity that oversold condition produced. The ECB decided to end it with a bond buying program that worked - the center held. But that's pretty much all that happened.

Okay, these are extremes. However, if you look at any of the other periods that we had huge oversolds they are actually all leaning toward the "don't sell" all, you can sell some camp. More important, other than 2008-9, we got sharp rallies and then brutal selloffs that had to be BOUGHT, not sold because policy makers created a more bountiful view of the future by taking actions that stimulated the economy and brought back confidence and hope: Fed rate cuts in 1998 and 2002 being the best example.

I hope we can all stipulate by now that the October 3rd Jay Powell statements about an economy running too hot and the long-term view of a challenge to China put out by Vice President Pence on October 4th at the Hudson Institute were the precipitants to this incredible selloff.

At the same time, if you want a depiction of the "selloff tracker" so to speak, look at oil. It's been a pretty decent harbinger at times of world growth provided that supply stays relatively the same. Now I think it is reflecting weaker demand and higher production. What matters, though, is that the algos have been set to this damned commodity the whole way down and until oil really does bottom those infernal machines won't turn off.

Why does it work like that?

BECAUSE IT HAS BEEN RIGHT. When managers find a leading correlation and it works why not just set the device to oil?

At the same time you also got the FANG rollover. Strangely the Nasdaq did not take out its low yesterday and oil hasn't taken out its low yet today.

So, not to be too short-hand but unless you think we are headed into some sort of cataclysm you can make a case NOT to sell this selloff but to buy it.

Yesterday at about this time I said that you might regret selling - that while the Fed is stuck, the president isn't. I said that a trade deal could be in the offing.

I think one could be simply because it can be had. Powell can't walk back what he just said. But the president's new talks can produce something that would make people feel that the trade war can be brought to a truce that takes the worst case off the table - total tariff, total economic war. I think the president's people do not want to be the reason why a strong economy turns into a weak one and without Powell on their side, alas, they may have no choice but to get the best deal they can, even if it isn't the hoped for one they sought.

Knowing that is possible, to me, says, don't sell - except to high grade into something else - unless you are confident you can get back in down 2.5%.

Is anyone that good?

Or to put it another way, unless this is 2008, the percentages say buy the decline when it is substantial, not sell it and bet that many stocks have seen their lows going into what may be a decent earnings season and a more benign Fed and a trade deal that surprises....

This column originally appeared at 9:21 a.m. ET on Real Money, our sister site for active traders. Click here to get great columns like this from Jim Cramer and other market experts even earlier in the trading day.