These three categories have only begun to really break down in this plunge. Let’s look at some charts. In a crash like this, you want to see deep new lows in all the vulnerable sectors before you can consider things complete.

Here are financials. These stocks are just revisiting July’s lows, yet to make a solid break to lower levels. XLF is our proxy:

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Next, REITs are finally breaking down, but they have a long ways to go, considering that an honest accounting of real estate prices would probably reveal that many of them have negative equity. IYR is a REIT-laden real estate ETF:

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For small-caps, we’ll switch to a 10-year shot of the Russell 2000 to show the magnitude of the bubble in crappy stocks since 2003. The Russell is making new 3-year lows, but like REITs, it has defied gravity since last year so there is a lot of air underneath these levels. (PEs on the Russell are infinite, by the way, just like the Dow.)

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May as well throw in an update on Wal-Mart for good measure. I shorted them a few weeks ago, not because they were horribly overvalued (they are, but less so than most junk out there), but because they have been boosted by a nifty-fifty “defensive stock” mania, and therefore the puts were dirt cheap. 2-year view:

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The fact that these laggards are just now breaking down, along with the lack of a meaningful bounce today, suggests to me that this plunge is not out of steam.