Here's why Commonwealth Bank of Australia got slammed today

This could be the start of a much, much bigger issue for bank shareholders.

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Commonwealth Bank of Australia (ASX: CBA) shares have plunged back below the $83 mark today. The stock dropped considerably early on, tumbling 94 cents or 1.1%to a low of $82.81.

Here are three reasons why the stock has been slammed today (the third one is particularly concerning)…

1)  Sell-off. The shares are being heavily weighed down by a dogged performance from US equity markets overnight. The Dow Jones Industrial Average dropped 1.9%, while the Nasdaq plummeted 2.1%. As a result, Aussie shares are being sold off en masse with the local benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) index down 1.1%.

2)  Profit taking. With the shares having struck a fresh all-time high of $83.92 yesterday, it is also possible some shareholders are taking profits. The shares have risen 2.4% in the last four days and nearly 15% in the last 12 months.

3)  It could also be something much more serious than a case of profit taking – perhaps even the start of a MARKET CRASH! After all, equity markets around the world have been surging for years and a pullback has always been on the cards.

It is that last point that bank shareholders should be most concerned about. Given the rallies of Australia's largest banks, being CBA, National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ), the banks could be the first to plummet should a correction occur.

A much better bet than the banks

We at the Motley Fool have long been bearish on the banks. Although we might have looked a little silly saying they were a bad investment prospect up until now (given how strongly they have performed), I'm certainly sticking by my judgement that they are heavily overpriced and are highly unlikely to deliver market-beating returns in the long-run.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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