Run, Flee, Hide, SELL

US Markets down ±3% today.

In my opinion this might be the turning point, 4%-indicator gives a sell as from today.
This decline today was thanks to dissapointing manufacturing data and another ominous unemployment report. The Institute for Supply Management's (ISM) index of manufacturing actitvity was the primary reason for today's drop. (It dropped from 52.9 to 52.6 - analists estimates were that it would surge to around 54.)

It's now just waiting for the highly anticipated nonfarm payrolls report tomorrow, this is - in my opinion - the only thing on the very short term to keep the confidence in the market. And we do need this confidence.

When it is disappointing too the market might take a nosedive down.

Why?

Investors are eager to take profits on their positions and the major decline of Oktober last year has not been forgotten.
Also: big funds (E.G. hedgefunds, government funds, pension funds etc.) are more in stocks than they normally should be because they wanted to take some profit in this rally. When the funds go back to the normal (obligation + gold)/shares ratio this will simply lead to sell-offs.

What to do?

In my opinion it is best to lay some stops under your stocks. Close stops of about 2-2,5% (for volatile stocks I'd suggest stop of max 4-5%) are good, if the market corrects tomorrow because of the nonfarm payrolls data you'll probably still be in.

I would dare to buy some puts of about 10% out of the money on November 2009. The risk is high, but when you invest like 0,5-1,0% in these things and you have your stops on the stocks, there might be a nice profit =D

If you want to take it slower(but still believe in the market going down), look at this. Very nice product nowadays, less risk, and they might even pay some dividends. =D

Also: Watch VIX coming days; today VIX up 5,89%!!