The recent 199-point smash on the Dow was just what the doctor ordered. It's unleashing a rush of fear and pessimism, which is the best thing in the world.

I've been fretting lately that equity investors were ignoring the ominous jump in long-term interest rates (bond yields). When stock prices continue to soar in the face of rising rates, a calamity often ensues -- as in the crashes of 1929, 1987 and 2000-2002.

Happily, it appears that some of the market's too-complacent players got the message. The Chicago Board Options Exchange's "fear index," the VIX, shot up to its highest level since the March stock market bottom. Another day or two of VIX readings in the 17-19 range should be enough to signal another good broad-based buying opportunity for stocks.

From a fundamental (as opposed to technical) standpoint, what needs to happen for the stock market to turn back up is a drop in bond yields. The current 5.1% yield on the benchmark 10-year Treasury is way too high for current economic conditions. Within the next few trading sessions, this indicator should break down, improving the relative attractiveness of the stock market.