What's with the 600 pt 3pm sell-off and recovery within 5 minutes? Algorithms? I thought massive swing effects are supposed to be under control now?
Why would you think that? Massive swing effects are often caused or exacerbated by algorithms trading on momentum.
They do that because trading on momentum usually pays, and doing the hard work of fundamental value investing is difficult and also hard to scale.
Momentum trading is fine if only a few people are doing it, but if enough of the market transitions to having 'no opinion except following the crowd', then you get instability just like this. And many factors since 2010 have made flash crash-like events easier to cause, not harder.
The optimal strategy during a crash is to sell everything as soon as possible and buy again at the bottom. Massive swings are endemic to the market.