Never have I seen the market start off a decline with such volatility. This is a very bad sign. Usually we get the 500 point drop at the end of the decline, not on day one. Often the volatility and magnitude of the breakout at the beginning of a move serves to foreshadow the size of the move over the longer term. It serves to define the trajectory or slope of the glide path for the move. This is very scarry stuff as it relates to Tuesday's decline. If the down move is to last for another few months then something like 1300-1320 on the s&p would be my first target with another 500-1000 point drop toward the very end. When volatility increased by such a magnitude as it did on Tuesday, the first thought that came to my mind is that it was somehow a mistake. A trading error. An overreaction. A malfunction at the NYSE or the computers did something whacko with the ES. As if someone got a very bad fill with the S&P down 50 handles and it would snap right back by end of day, with everything getting better via a huge bounce the next day. And then the markets would calm down and it would be back to business as normal. Similarly to 2004 when GOOG went up 30 points from 140 to 170. My first thought was the market had done something dumb with GOOG and shorts just capitulated and all bought at once and $170 was somehow a dumb mistake. But here here GOOG sits above $400. And here was are 3 days later and the guy who got the worst possible sell fill on Tuesday is still a happy camper. And everyone who bought the S&P down 39 handles on Tuesday never got a chance to sell for a profit and is now down an additional 15+ handles. It now sinks in that Tuesday was not somehow a volatility "Mistake". But perhaps the beginning of a new ERA. Now that it is the weekend, we have time to think about some of the fundamentals of the world and it all seems very nasty. We see that an entire lair of the mortgage market is now wiped off the map. We now realize that even the blue chip financial stocks could have high levels of exposure. Brokerage houses credit spreads have gone way up and realize that many of our favorite broker names are bigger players in subprime than NEW and NFI. It then sinks in that those million share block trades on the brokerage stocks from Tuesday was the smart money getting out and now some of us are still hold them points lower. How will any of this get better any time soon? Seems likely that there will be more and more bad news and it will be worse and worse. Such as friday nights' New Century all but done news. So maybe our favorite financials and the S&P can bounce some. But that may be all we can hope for. Also with mortgage rules getting tougher and subprime off the board, how does the housing market not fall to the next lower level? Especially with all the foreclosures about to hit the market over the next 6 months. I would never want to advise someone to get overly bearish or bullish on a message board. Because at the end of the day i'm smart enough to at least know that I know little. But everything tells me that this is a risky time to be doubling down on long bets or to make a large play that this is the end of the correction. That is at least the mindset I'm going to be trading off of. Not going to do anything stupid by betting huge the market won't keep sliding or tripple down on losing longs. Likewise, can't add to any shorts without some sort of bounce or time duration of going sideways. These are my random musings. Good luck.